{"id":154432,"date":"2023-08-24T09:59:02","date_gmt":"2023-08-24T13:59:02","guid":{"rendered":"https:\/\/44.250.171.167\/?p=154432"},"modified":"2023-08-24T09:59:04","modified_gmt":"2023-08-24T13:59:04","slug":"electrifying-india-ft-ntpc-a-primer-on-the-stock","status":"publish","type":"post","link":"https:\/\/alphastreet.com\/india\/electrifying-india-ft-ntpc-a-primer-on-the-stock\/","title":{"rendered":"Electrifying India ft NTPC – A primer on the stock"},"content":{"rendered":"\n

\u201cFor FY 22-23, the Board of Directors have recommended a final dividend of Rs.3 per share, subject to the approval of our shareholders at the upcoming AGM, this final dividend is in<\/em> addition to the interim dividend already paid at Rs.4.25 per share. So, put together it will become Rs.7.25 per share\u201d<\/em><\/p>Management Commentary – Q1FY23 Earning Call<\/cite><\/blockquote>\n\n\n\n

<\/div>\n\n\n\n

Stock data<\/strong><\/h3>\n\n\n\n
Ticker<\/strong><\/td>NTPC<\/td><\/tr>
Exchange<\/strong><\/td>BSE and NSE<\/td><\/tr>
Industry<\/strong><\/td>Power Generation and Supply<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
Price Performance:<\/strong><\/h5>\n\n\n\n
Last 5 days<\/strong><\/td>+2.18%<\/td><\/tr>
YTD<\/strong><\/td>+31.25%<\/td><\/tr>
Last 1 year<\/strong><\/td>+38.77%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
<\/div>\n\n\n\n

Company description:<\/strong><\/h3>\n\n\n\n

NTPC (National Thermal Power Corporation) Ltd along with its subsidiaries\/ associates & Joint Ventures is primarily involved in generation and sale of bulk power to State power utilities. Other business of the group includes providing consultancy, project management & supervision, energy trading, oil & gas exploration and coal mining.<\/p>\n\n\n\n

Power Plants Portfolio:<\/strong><\/p>\n\n\n\n

As of August 2023, the company has a power portfolio of ~ 73,024 MW from 89 power plants.<\/p>\n\n\n\n

Out of total capacity, ~81.5% comes from coal plants, followed by gas\/ liquid fuel plants (~9%), hydro (~5%) & renewables (~4.5%).<\/p>\n\n\n\n

It owns 17% of total installed capacity in India with ~25% share in electricity generation in India. Company’s allocated capacity is well diversified across regions. As on August 2023, none of a single region contributes more than 40% of total allocated capacity of company<\/p>\n\n\n\n

PLF Factor:<\/strong><\/p>\n\n\n\n

The company has been operating at higher PLF from its thermal power stations as compared to All India thermal PLF for the last 5 years. NTPC Coal Stations achieved PLF of 75.9% against All India PLF of 64.2% in FY23.<\/p>\n\n\n\n

Under Construction Assets:<\/strong><\/p>\n\n\n\n

As of August 2023, the company has added 4 GW  of power in FY23 while 17 GW of power is under construction & 18 GW is under planning<\/p>\n\n\n\n

Vision:<\/strong><\/p>\n\n\n\n

The company wants to expand its power capacity from ~63 GW to 130 GW by 2032. It also aims to increase its concentration of non-fossil fuel assets from 7% of total capacity to 30% by 2032.<\/p>\n\n\n\n

Acquisitions:<\/strong><\/p>\n\n\n\n

During FY20, the company acquired the entire stake of GOI in THDC India Ltd and North Eastern Electric Power Corporation Ltd (NEEPCO). It acquired ~75% stake of THDC and 100% stake of NEEPCO from Govt of India for a total consideration of ~11,500 crores.<\/p>\n\n\n\n

THDC and NEEPCO have installed capacity of ~3,300 MW and under construction capacity of ~3,100 MW.<\/p>\n\n\n\n

Coal Needs:<\/strong><\/p>\n\n\n\n

For the company’s coal requirements, the company has long term fuel supply agreements for total annual contracted quantity (ACQ) of ~175 MnTPA with Coal India Ltd (CIL) and Singareni Collieries Company Ltd (SCCL).<\/p>\n\n\n\n

The company owns 3 coal blocks i.e. Pakri Barwadih, Dulanga & Talaipalli coal mines.<\/p>\n\n\n\n

The ultimate capacity of these mines are ~103 MnTPA when all mines reach their peak capacity. The company managed to produce 23 MMT in FY23 and It aims to produce 34 MMT in FY24.<\/p>\n\n\n\n

The estimated geographical reserves of these coal blocks are 5 billion tonnes.<\/p>\n\n\n\n

Cost-Plus tariff Structure<\/strong><\/p>\n\n\n\n

The company maintains robust profitability due to long-term PPAs backed by a cost-plus tariff structure for sale of power to DISCOMS.<\/p>\n\n\n\n

Financials:<\/strong><\/h5>\n\n\n\n
\"\"\/<\/figure>\n\n\n\n
<\/div>\n\n\n\n

What we like:<\/strong>  <\/h3>\n\n\n\n
  1. Steady Power Demand to aid growth:<\/strong> <\/li><\/ol>\n\n\n\n

    NTPC benefits from the consistent demand for electricity in India. In FY 2020-21, India’s power demand stood at around 1,400 billion units, indicating a continuous need for electricity, which NTPC contributes to significantly. Also, NTPC today generates 25% of the electricity consumption in India which is further expected to rise in the future thus contributing to the topline of the company.<\/p>\n\n\n\n

    1. Government Support: <\/strong><\/li><\/ol>\n\n\n\n

      As a government-owned entity, NTPC enjoys support and stability. In FY 2020-21, the Indian government launched the “Aatmanirbhar Bharat Abhiyan” to strengthen various sectors, including power. NTPC, being a key player, is likely to benefit from such initiatives.<\/p>\n\n\n\n

      1. Diversified Power Generation:<\/strong><\/li><\/ol>\n\n\n\n

        NTPC generates power from multiple sources. In July 2021, NTPC had a total installed capacity of around 66 GW, with approximately 30% of that coming from renewable sources like solar and wind. Further the company expects to increase this renewable power capacity to 60 GW by 2032.<\/p>\n\n\n\n

        1. Strong Infrastructure: <\/strong><\/li><\/ol>\n\n\n\n

          NTPC’s reliable power generation infrastructure helps in consistent power supply. In FY 22-23, NTPC achieved a plant load factor (PLF) of over 75.9% across its coal-based plants, indicating efficient plant utilization.<\/p>\n\n\n\n

          1. Experienced Management:<\/strong> <\/li><\/ol>\n\n\n\n

            NTPC’s experienced management is reflected in its operational efficiency. This can be further witnessed as  NTPC’s PLF for its coal-based plants remained consistently high even during the COVID-19 pandemic.<\/p>\n\n\n\n

            1. Long-Term Contracts: <\/strong><\/li><\/ol>\n\n\n\n

              NTPC often signs long-term power purchase agreements (PPAs). For example, in FY 2020-21, NTPC signed a 25-year PPA for 300 MW solar power with the Solar Energy Corporation of India (SECI), ensuring stable revenue streams.<\/p>\n\n\n\n

              <\/div>\n\n\n\n

              Factors to consider:<\/strong><\/h3>\n\n\n\n
              1. Regulatory changes can impact NTPC’s operations. For instance, changes in coal pricing regulations can affect production costs, impacting profitability.<\/li>
              2. Fluctuations in fuel prices can affect NTPC’s costs. For instance, rising coal prices can impact the cost of power generation, potentially squeezing margins.<\/li>
              3. Environmental concerns drive the need for emission reduction. NTPC’s efforts to comply with emission norms involve investments. For example, NTPC allocated funds for a project to install flue gas desulfurization systems to reduce emissions.<\/li>
              4. Being a government-owned entity, NTPC’s decision-making processes can be slower. Delays in obtaining approvals or implementing projects can impact operational agility.<\/li><\/ol>\n","protected":false},"excerpt":{"rendered":"

                \u201cFor FY 22-23, the Board of Directors have recommended a final dividend of Rs.3 per share, subject to the approval of our shareholders at the upcoming AGM, this final dividend is in addition to the interim dividend already paid at Rs.4.25 per share. So, put together it will become Rs.7.25 per share\u201d Management Commentary – […]<\/p>\n","protected":false},"author":1863,"featured_media":148972,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1941,5746,6352],"tags":[8621,9731,1168],"class_list":["post-154432","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stock-analysis","category-energy-stocks","category-research-summary","tag-electric-power","tag-power-transmission","tag-renewable-energy"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2023\/07\/DALL\u00b7E-2023-07-03-18.17.43-hydroelectric-power-1.png","jetpack_likes_enabled":false,"jetpack-related-posts":[{"id":134039,"url":"https:\/\/alphastreet.com\/india\/should-investors-add-ptc-india-ltd-nse-ptc-to-their-basket\/","url_meta":{"origin":154432,"position":0},"title":"Should Investors Add PTC India Ltd. (NSE: PTC) to their Basket?","author":"Priti_Ramgarhia","date":"September 19, 2022","format":false,"excerpt":"Being a pioneer in initiating the power market in India, PTC India (NSE: PTC) undertakes trading activities. The company\u2019s recent earnings report reflects strong profits, a sound capital position, and a robust cash position. Also, cost management reflects operational efficiency. Additionally, to cater to the changing dynamics of the sector,\u2026","rel":"","context":"In "Earnings"","block_context":{"text":"Earnings","link":"https:\/\/alphastreet.com\/india\/category\/earnings\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/09\/PTC-India.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/09\/PTC-India.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/09\/PTC-India.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/09\/PTC-India.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/09\/PTC-India.jpg?resize=1050%2C600&ssl=1 3x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/09\/PTC-India.jpg?resize=1400%2C800&ssl=1 4x"},"classes":[]},{"id":135141,"url":"https:\/\/alphastreet.com\/india\/reliance-industries-reliance-strong-fundamentals-dividend-policy-makes-it-attractive-investment\/","url_meta":{"origin":154432,"position":1},"title":"Reliance Industries (RELIANCE): Strong Fundamentals, Dividend Policy Makes It Attractive Investment","author":"Priti_Ramgarhia","date":"October 26, 2022","format":false,"excerpt":"Being India\u2019s largest company by sales, profits, and market value, Reliance Industries (NSE: RELIANCE) turned triumphant striking a balance between consumer business and energy. The company\u2019s recent earnings report reflects strong profits and revenues in major segments such as digital services and retail, though the Oil-to-Chemicals business remained muted on\u2026","rel":"","context":"In "Analysis"","block_context":{"text":"Analysis","link":"https:\/\/alphastreet.com\/india\/category\/stock-analysis\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/10\/Reliance-2.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/10\/Reliance-2.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/10\/Reliance-2.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":133965,"url":"https:\/\/alphastreet.com\/india\/3-stocks-to-watch-in-the-prospering-oil-gas-sector\/","url_meta":{"origin":154432,"position":2},"title":"3 Stocks to Watch in the Prospering Oil & Gas Sector","author":"Priti_Ramgarhia","date":"September 16, 2022","format":false,"excerpt":"The oil and gas sector, one of the eight major industries in India, plays a key role in economic growth. The rising curve of energy demand, in turn, increases the need for oil and gas, thereby attracting investments and stoking economic growth. Globally, India is recognized as the third-largest consumer\u2026","rel":"","context":"In "Analysis"","block_context":{"text":"Analysis","link":"https:\/\/alphastreet.com\/india\/category\/stock-analysis\/"},"img":{"alt_text":"","src":"https:\/\/lh6.googleusercontent.com\/WWh3yDI_-FNSWykHEtYOxeb1TBfkYI5tb50DZZZkIIgDzwqIkltdHEferNEGK00x7ZiyLbPlyvLWjESVa9kfB0LS9Bj9BD2DBhhSOWaYMfk90bnnyk36AAJkOqUH2aKVvi4uwJvyaP0Jn9Gd7rRO7mJP2wqlQ6fT1ISATLCQjgz5zJZ-dk9TEGyLSg","width":350,"height":200},"classes":[]},{"id":135293,"url":"https:\/\/alphastreet.com\/india\/can-bajaj-electricals-nse-bajajelec-be-a-golden-egg-in-investors-basket\/","url_meta":{"origin":154432,"position":3},"title":"Can Bajaj Electricals (NSE: BAJAJELEC) Be a Golden Egg in Investors\u2019 Basket?","author":"Priti_Ramgarhia","date":"November 1, 2022","format":false,"excerpt":"Being ranked among India\u2019s most preferred brands and providing a diverse portfolio of products, Bajaj Electricals Limited (NSE: BAJAJELEC) serves consumers with unique and innovative consumables. The company\u2019s financials reflect steady profits and revenues with some exceptions, rising demand, and a robust cash position. Also, stable cost levels reflect operational\u2026","rel":"","context":"In "Analysis"","block_context":{"text":"Analysis","link":"https:\/\/alphastreet.com\/india\/category\/stock-analysis\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/10\/Q1FY23-BAJAJELEC.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/10\/Q1FY23-BAJAJELEC.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/10\/Q1FY23-BAJAJELEC.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/10\/Q1FY23-BAJAJELEC.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/10\/Q1FY23-BAJAJELEC.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":134670,"url":"https:\/\/alphastreet.com\/india\/infosys-q2fy23-results-out-revenues-up-by-23\/","url_meta":{"origin":154432,"position":4},"title":"Infosys Q2FY23 results out, Revenues up by 23%","author":"Chirag Gupta","date":"October 14, 2022","format":false,"excerpt":"On October 13, IT services major Infosys reported a 11% rise in its consolidated net profit for the quarter ended September 30, 2022 on the Y-O-Y basis. The company also declared an interim dividend of Rs 16.5 per share and sees 15 - 16 per cent growth in revenue in\u2026","rel":"","context":"In "AlphaGraphs"","block_context":{"text":"AlphaGraphs","link":"https:\/\/alphastreet.com\/india\/category\/infographics\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/10\/infosys-dh-1153267-1665679669.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/10\/infosys-dh-1153267-1665679669.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/10\/infosys-dh-1153267-1665679669.png?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/10\/infosys-dh-1153267-1665679669.png?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/10\/infosys-dh-1153267-1665679669.png?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":133394,"url":"https:\/\/alphastreet.com\/india\/titan-company-limited-research-report\/","url_meta":{"origin":154432,"position":5},"title":"Titan Company Limited Q1 FY 23Research Report","author":"sreerupa","date":"August 19, 2022","format":false,"excerpt":"Stock Data Ticker: TITAN Exchange : NSE and BSE Industry: Jewellery & Retail As at 19th Aug, 2022 the price of Titan Share price is Rs 2,446.00. The price has declined by 1.32% based on previous share price of Rs. 2492.2. In last 1 Month, Titan Company share price moved\u2026","rel":"","context":"In "Analysis"","block_context":{"text":"Analysis","link":"https:\/\/alphastreet.com\/india\/category\/stock-analysis\/"},"img":{"alt_text":"Research Summary","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2020\/04\/Research-summary.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2020\/04\/Research-summary.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2020\/04\/Research-summary.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]}],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/posts\/154432","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/users\/1863"}],"replies":[{"embeddable":true,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/comments?post=154432"}],"version-history":[{"count":0,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/posts\/154432\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/media\/148972"}],"wp:attachment":[{"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/media?parent=154432"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/categories?post=154432"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/tags?post=154432"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}