Stock Details
| Market Cap | ₹ 244453 Cr. | |
| CMP | ₹ 252 | |
| 52 Week H/L | ₹ 255 / 161 |
Shareholding
| Promoters | 51.10% | |
| FIIs | 16.69% | |
| DIIs | 29.02% |
Summary
NTPC Limited is India’s Largest power generating company with total installed capacity of 73 GW in the group.
- NTPC has 17% of total installed capacity in India with 25% generation share
- In the next 3 year company is planning to add 10 GW conventional capacity and 16 GW renewables capacity.
Thermal capacity additions would drive double-digit growth in the regulated equity base and the same provides earnings growth/cash flow visibility over FY24-25. Therefore the cash generated can be used to fund expansion of renewables portfolio.
NTPC will add around 16 GW renewables capacity totaling of around 20 GW by FY26E. It would add meaningful EBITDA contribution from Renewables portfolios. In my view a proposed IPO of NTPC Green Energy Limited will help value unlocking for investors.
NTPC’s vision to add new areas of green hydrogen/battery storage, nuclear energy etc will diversify EBITDA in medium to long term.
Financial Summary
| Particulars | FY 21 | FY 22 | FY 23 | H1 FY 24 |
|---|---|---|---|---|
| Sales | 97,700.4 | 121,174.61 | 163,769.8 | 79997.57 |
| EBIDTA | 27,092.7 | 36,016.0 | 43,228.4 | 21,906.87 |
| EBIDTA ( in % ) | 27.7 | 29.7 | 26.4 | 27.38% |
| Net Profit | 10,112.8 | 16,273.0 | 17,196.7 | 7951.05 |
| EPS | 10.2 | 16.4 | 17.4 | 8.20 |
| Return on NW(%) | 8.9 | 11.5 | 12.9 | 14.5 |
| Return on Equity(%) | 4.8 | 9.1 | 10.7 | 5.52 |
Investment Rationale
Thermal Capacity Addition – to drive stable earning growth
NTPC has current installed thermal capacity of 65 GW out of total installed capacity of 73 GW. Management has provided guidance to expand thermal capacity by 10 GW in three years with estimated capex of around ₹ 80,000 CR. The above capex is funded in the ratio of 70% debt and 30% internal accruals. And the regulated tariff model assures that NTPC will earn fixed RoE of 15.5%.
This will ensure healthy and stable cash flow which will be used to fund the ambitions of renewables energy capacity.
Strong focus on transiting from thermal business to green energy to drive growth.
NTPC has planned to increase its renewables capacity by 16 GW by FY26E with estimated capex of around ₹ 80,000 – 90,000 CR. NTPC is aggressively planned to have around more than 40% energy capacity come from renewables energy sources.
Currently NTPC has installed capacity of 3.3 GW with 5.9 GW under construction with 10.2 GW under pipeline.
2QFY24 Concall Updates : 7 GW of renewables capacity under construction will be commission in the next 12-18 months
Aggressive ambitions of renewables capacity :
NTPC is very aggressive in transiting from a power generating company to an energy company. With plans to enter areas like green hydrogen , nuclear power ( JV agreement with Nuclear Power Corporation of India for around 4.2 GW project under consideration ).
NTPCs plan for green hydrogen
As per management during concall of 2QFY24 capex in renewables capacity is funded in the ratio of 80% from internal accruals and 20% from debt (approximately). And strong cash flow from existing capacity will help in funding capex for renewables capacity.