Has anyone looked @ NTPC lately? Sure there are issues related to the power sector in our country, but a company like NTPC can certainly whether the storm. Did some work on its historical multiples (P/B), and at this level it is close to its lowest multiple.

10th Percentile
10yr 1.5
7yr 1.5
5yr 1.4
3yr 1.3
Current 1.08
Min 1.06 (Nov 2004-Apr 2014)

Net net â my thesis here is that a company like NTPC is being sold at its historical lows, and Mr market is factoring maybe too much of negative news. Thoughts invited!

Co was rep by K Biswal, Director Finance.Takeaways of the call by Capital Mkt;

Adjusted PAT for Q4FY14 stood at Rs 2988.69 crore, a growth of 35.41%. The adjusted PAT for FY14 was at Rs 10562.21 crore, up 16.44%yoy.

Installed capacity of NTPC Group increased by 1835 MW in the last 12 months ended March 2014 to 43108 MW. The commercial capacity of the NTPC Group increased by 2675 MW in the last 12 months to 41948 MW. About 1160 MW of generation capacity that is synchronized are yet to be declared commercial and this include one unit of 660 Mw of Barh and one unit of 500 MW of Vallur TPS.

PAF of Coal based power plant for Q4FY14 stood at 99.75%. The PAF for corresponding previous period was at 92.66%. The PAF of gas based power plants stood at 99.71% for the quarter and 95.94% in corresponding previous period.

PLF of Coal based power plant for Q4FY14 stood at 88.70% compared to 86.87% in corresponding previous period. The PLF of gas based power plants stood at 35.64% for the quarter compared to 42.59% in corresponding previous period. The All Indian thermal PLF for the quarter stood at 68.19% compared to 71.69% in the corresponding previous period.

The domestic coal supply was higher by 3.49%yoy (or 1.46 MMT) to 43.34 MMT in Q4FY14. The imported coal supply jumped by 21.24%yoy (up 0.41 MMT) to 2.34 MMT.

The average tariff for FY14 was Rs 3.30/unit.

Capex incurred in 2013-14 was Rs 21705 crore compared to 20204 crore in the corresponding previous period. Gross block as end of March 2014 stood at Rs 116610.59 crore.

Marginal fall in interest is due to repayment of debt on the capitalized projects. The company paid Rs 4500 crore of debt in 2013-14.

The company is hopeful of getting coal from its own captive mines in next year. The company is not experienced in mining and appointed MDO for Pakri Bariwadhi(PB) and with mining not commence in PB mines on time despite time extension the company cancelled the contract of MDO. MDO for PB, Tulanga, and Kirandul will be appointed this year.

The company is not following CERC's new tariff order as it has went to High Court against it and the next hearing is on May 19, 2014. Till clarity emerges the company will not implement the new CERC tariff.Lower tax is largely due to returns.

According to the experience of the company there exists. Though CEA says there will not be any difference in GCV of coal fired and GCV of coal received at stockyard there exists difference. Since domestic power plants are designed in such a way as there is no provision to stock coal from different sources/quality in a separate place and fire it separately. Since coal mix is fired there will be difference. So customer should be received on coal received at stockyard and not at fired. Moreover the GCV of coal will also change during the storing period in the yard.

Prior period sales for the quarter ended March 2014 is Rs 1129 crore and the fuel cost pertain to that period is Rs 1089.78 crore.

Agree with you Rohit,

Till last week, NTPC had not taken part in the major rally of the cyclical stocks. Even right now, while most of the cyclical stocks have rallied upwards of 50%, NTPC has just rallied 15%. In my opinion, it is one of the safer bets in the cyclical stocks due to the low leverage of 0.66 and good ROE record.

Con call the co was rep by K Biswal, Director Finance and NN Misra, Director (Operations).Key take aways of the call by Capital mkt;

Regulated Equity as on June 30, 2014 stood at Rs 35208 crore up from about Rs 35139 crore as end of March 2014.

Installed capacity (including that of JV) as end of Jun 2014 stood at 43128 MW. The gross generation for the quarter was up 10.75% to 63.133 Billion Units in Q1FY15 from 57.005 Billion Units in corresponding previous period. Energy sent out is up 10.83%yoy to 58.852 billion units. Coal Stations of the company clocked a PLF of 84.29%, an increase by 5.17% over previous corresponding quarter.Adjusted PAT for the quarter ended Jun 2014 stood at Rs 1947.06 crore compared to Rs 2291 crore in the corresponding previous period.In-spite of posting outstanding generation growth, profitability in Q1FY15 has declined owing to the implementation of Tariff Regulations 2014 having provision of retrospective tightening of technical parameters post investment decision. Almost 53% of Energy Sent Out has negative contribution on account of implementation of Tariff Regulations 2014.

The company is reassessing its operating methods. Since each plant have unique solutions the improvement can be achieved only at the end of the year. And at end of the year none of the plants of the company will under recover fixed cost.

Barh Supercritical power plant is already commissioned and the commercial declaration is awaited. The FSA for this plant is Chatti Bariatu but with coal production out of it expected by this year there are logistic constraints. Till then the company will buy coal from coal India from e-auctions, MOU route and blending.The company within current fiscal target to place BTG orders for 6600 MW i.e. Fargaon 1320 MW, Pargati 2640 MW, Tanda 1320 MW and Katwa 1320 MW.

The company got expression of interest for about 55000 MW for its call for buying out distressed power projects/plants from IPP, Captive Power Plant and plants of utilities. All EOI is from IPPs and the company is carrying out due diligence and will decide on this by end of this fiscal.In case of brown field expansion the company is working out details and will decide soon.

The key point of contention of the company with CERC's new tariff order is the operating norms can't be changed on retrospective effect for operating or under construction projects as their financial closure and the development is based on certain returns and assumptions. Next hearing on the company's case challenging new tariff order of CERC in Delhi High court is Aug 28, 2014.

The company is targeting a coal production of 1 mln tone this year from Chatti Bariatu and if law and order improves in Jharkhand the coal production will improve to 3 mln tones next year.PLF incentive received in Q1FY15 is Rs 130 crore (against PAF incentive of Rs 278 crore in Q1FY14) as the incentive structure under new tariff regulation 2014 changed to PLF from earlier PAF. The company's average PAF incentive in last 10 years was about Rs 500-600 crore. This fiscal the company is expected to achieve Rs 500-600 crore of PLF incentive. In Q1FY15 the loading was good if the loading continue to be good for rest of the fiscal the company even surpass the Rs 500-600 crore figure.