29 May 2017
4QFY17 Results Update | Sector: Utilities
NTPC
BSE SENSEX
31,109
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val, INRm
Free float (%)
S&P CNX
9,605
NTPC IN
8,245
1,417.8 / 21.1
178 / 138
-9/-22/-5
758
30.3
CMP: INR156
TP: INR198 (+27%)
Buy
PAT growth muted on change in GCV measurement
Capacity addition to accelerate and drive earnings growth; Maintain Buy
NTPCsa (NTPC standalone) 4QFY17 PAT, adjusted for investment write-off of
INR7.8b and employee wage hike provision of INR3.2b (not considered as pass-
through in tariff for now), was up 14% YoY to INR31.8b. However, on a like-to-
like basis, adjusting for prior-period items, we estimate PAT was broadly flat YoY
at INR26.6b (est. of INR24.1b), primarily due to the impact of change in
measurement of GCV. Regulated equity (RAB) increased 6% YoY to INR440b. For
FY17, adjusted for one-offs/prior-period items, PAT rose 1% YoY to INR96b.
Pay revision impacts reported performance:
Of the pay revision provision of
INR8.7b, NTPC has conservatively recognized INR3.5b (50% of ex-gratuity
hike) as non-recoverable through tariff. However, we estimate the regulator,
like in the past, would allow complete pass-through of wage hike.
Commercialization of 4.7GW (NTPCsa ex-solar)
(Exhibit 3) and capitalization
of 5.3GW are guided for FY18. We estimate commercialization would be
lower at 3.3GW (NTPCsa ex-solar), still an increase from 1.4GW in FY17.
JV performance improves:
PAT of JVs increased from INR1.6b in FY16 to
INR6.2b in FY17, driven by improved performance at NTPC-SAIL, NTPC-TN
and Aravali. Consolidated reported PAT was flat YoY at INR107b in FY17.
Expect some delay in execution, but earnings outlook remains robust
Although there are some delays in project execution, the earnings growth
outlook remains robust. We expect CAGR 9.5% in DC and 17% in regulated
equity over FY16-21E.
NTPC’s consolidated EPS CAGR is estimated at 11% over FY17-21E. RoE is
expected to improve from ~11% in FY17 to ~12% in FY20. We value the stock
at INR198 based on DCF. Maintain
Buy.
Financials & Valuations (INR b)
2016 2017E
Y/E Mar
787.1
826.9
Net Sales
191.6
232.2
EBITDA
101.3
99.4
PAT
12.3
12.1
EPS (INR)
15.4
-1.8
Gr. (%)
108.2
115.4
BV/Sh (INR)
11.9
10.8
RoE (%)
7.3
6.4
RoCE (%)
14.0
14.3
P/E (x)
1.6
1.5
P/BV (x)
2018E
963.5
300.4
118.0
14.3
18.7
124.3
11.9
7.5
12.0
1.4
Estimate change
TP change
Rating change
Quarterly Performance (standalone) – INR m
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Sanjay Jain
(SanjayJain@MotilalOswal.com); +91 22 6129 1523
Dhruv Muchhal
(Dhruv.Muchhal@MotilalOswal.com); +91 22 6129 1549

NTPC
Exhibit 1: NTPC key operating variables
1Q
Capacity
Installed
Commercial
Regulated Equity
Generation
Gross
Electricity sales
Availability
Coal
Gas
PLF
Coal
Gas
Fuel
Coal Received
o/w imported
% imported
Gas received
Per unit
Realization
Fuel cost
Fixed charge
GW
GW
INR b
b kWh
b kWh
%
%
%
%
mt
mt
%
mmscmd
INR/kWh
INR/kWh
INR/kWh
43.1
42.0
352.1
63
59
89.3
90.1
84.3
39.8
39.6
3.6
9.0
7.3
3.17
2.17
1.00
FY15
2Q
43.1
42.0
352.1
55
51
76.8
89.1
73.2
33.4
36.8
2.9
7.8
6.7
3.32
2.22
1.10
3Q
4Q
44.4
43.1
369.2
61
57
97.2
96.5
82.7
26.7
46.0
4.9
10.6
5.6
3.31
2.18
1.13
1Q
45.0
43.1
369.2
59
54
91.6
96.6
77.6
28.5
42.3
3.9
9.1
5.9
3.28
2.11
1.16
FY16
2Q
45.5
43.9
389.0
60
56
88.1
97.6
77.3
25.7
37.2
2.6
6.9
5.1
3.28
2.06
1.22
3Q
4Q
46.7
45.1
414.2
62
58
95.2
98.2
81.3
17.8
40.6
1.1
2.7
3.8
3.13
1.80
1.33
1Q
47.2
45.9
420.1
65
60
90.5
93.6
81.4
26.3
40.9
0.6
1.4
5.5
3.13
1.93
1.20
FY17
2Q
47.2
45.9
423.1
61
56
89.8
97.0
74.7
23.6
36.3
0.3
0.7
5.1
3.41
2.11
1.30
3Q
48.0
45.9
424.8
61
57
91.5
93.3
77.2
23.9
41.8
0.1
0.3
5.0
3.32
2.06
1.26
4Q
50.5
47.3
440.5
64
60
95.0
91.0
81.2
24.0
41.5
0.1
0.2
5.1
3.34
2.00
1.33
43.1
42.6
366.2
61
57
91.0
93.2
80.8
31.8
44.5
4.9
11.1
6.1
3.26
2.11
1.15
45.5
44.4
393.9
61
57
92.8
96.8
78.2
28.5
41.6
1.9
4.7
6.1
3.06
1.88
1.19
Source: MOSL, Company
Exhibit 2: NTPC (standalone) adjusted P&L (for one-offs) – INR m
Adjusted P&L
Net Sales
Fuel cost
Other. Exp
Int.
Dep
PBT
Generation
Other Incomes
Tax
Rate (%)
Adj PAT
A. Generation
Regulated Equity - Reported
- Base RoE @15.5%
- PAF/PLF incentives
- Others
B. Other Income
Q1FY16
179,280
115,091
20,324
7,515
11,863
26,941
24,487
2,454
4,199
15.6
22,742
20,670
369,160
15,178
780
4,712
2,072
Q2FY16
185,672
115,408
22,494
8,265
12,887
28,281
26,617
1,664
4,707
16.6
23,575
22,187
389,020
14,690
890
6,608
1,387
Q3FY16
175,098
106,252
21,402
8,424
13,716
27,808
25,303
2,505
5,358
19.3
22,450
20,428
393,853
15,168
-17
5,276
2,022
Q4FY16
184,818
104,183
27,667
8,760
13,257
35,023
30,950
4,073
8,556
24.4
26,467
23,389
414,204
15,656
1,052
6,681
3,078
FY2016
724,867
440,935
91,987
32,964
51,723
117,953
107,258
10,696
22,797
19.3
95,157
86,528
414,204
60,692
2,705
23,132
8,628
Q1FY17
188,937
116,324
20,123
9,004
13,952
31,113
29,534
1,579
7,066
22.7
24,047
22,827
420,146
15,582
1,530
5,715
1,220
Q2FY17
192,650
119,130
20,936
8,898
14,342
31,031
29,344
1,686
7,621
24.6
23,410
22,138
423,072
16,337
5,801
1,272
Q3FY17
190,219
118,252
20,895
9,090
14,853
29,655
27,129
2,526
7,207
24.3
22,448
20,536
424,822
16,428
Q4FY17 FY2017
198,929 772,779
119,464 473,169
23,234
87,592
8,979
35,972
16,062
59,208
35,892 127,329
31,190 116,837
4,702
10,493
9,286
31,102
25.9
24.4
26,606
96,227
23,121
88,298
440,489 440,489
16,765
65,113
1,500
3,030
4,108
4,855
20,155
1,912
3,485
7,930
Source: MOSL, Company
Exhibit 3: Commercialization guidance for FY18 (NTPCsa ex-solar)
Bongaigaon U-2 & U-3
Kudgi U1, U2 and U3
Mouda II U4
Solapur U1
Unchahar
500
2,400
660
660
500
4,720
Source: MOSL, Company
29 May 2017
2

NTPC
Exhibit 4: Commercial capacity addition estimates
Source: MOSL, CEA, Company Data
29 May 2017
3

NTPC
Financials and Valuations
Income Statement
Y/E March
Net Sales
Change (%)
Total Expenditure
EBITDA
Margin (%)
Depreciation
EBIT
Interest
Other Income - Rec.
Exceptional item
Profit before Tax
Tax
Tax Rate (%)
Reported PAT
2013
657,370
5.9
486,699
170,672
26.0
33,968
136,704
19,244
31,188
17,138
165,786
39,592
23.9
126,194
2014
789,506
20.1
592,401
197,106
25.0
47,700
149,406
32,031
27,601
-119
144,858
30,824
21.3
114,034
2015
806,220
2.1
634,280
171,941
21.3
55,646
116,295
35,704
20,789
3,182
104,562
4,638
4.4
99,924
2016
787,055
-2.4
595,423
191,632
24.3
61,534
130,098
41,513
12,341
110
101,035
-589
-0.6
101,624
2017
820,808
4.3
602,508
218,300
26.6
60,099
158,201
36,511
15,915
0
137,606
30,466
22.1
107,139
2018E
852,535
3.9
600,568
251,966
29.6
73,088
178,878
50,220
10,196
0
138,855
28,435
20.5
110,419
(INR Million)
2019E
971,172
13.9
650,460
320,712
33.0
92,054
228,658
71,897
11,108
0
167,869
34,496
20.5
133,374
Balance Sheet
Y/E March
Share Capital
Reserves
Net Worth
Minority Interest
Loans
Deferred Tax Liability
Capital Employed
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Capital WIP
Investments
Current Assets
Inventory
Account Receivables
Cash and Bank Balance
Loans and Advances
Others
Current Liabilities
Payables
Other current liabilities
Net Working Capital
Application of Funds
E: MOSL Estimates
2013
82,455
721,421
803,875
0
581,461
9,153
1,394,489
1,032,457
403,096
629,361
371,094
91,376
519,333
40,572
53,650
184,902
113,790
126,420
216,676
51,324
165,352
302,657
1,394,489
2014
82,455
790,843
873,297
6,804
814,549
12,393
1,707,044
1,313,937
471,858
842,080
538,250
16,635
603,487
59,885
67,257
186,876
173,875
115,595
293,408
72,240
221,168
310,080
1,707,044
2015
82,455
738,485
820,940
8,879
1,022,520
12,656
1,864,995
1,443,608
525,077
918,530
675,547
141
601,543
79,725
92,499
161,390
190,883
77,046
330,766
71,076
259,690
270,777
1,864,995
2016
82,455
809,511
891,965
8,928
1,120,194
14,094
2,035,181
1,632,140
587,180
1,044,959
815,497
148
543,886
79,592
101,740
57,370
202,075
103,110
369,310
68,266
301,044
174,577
2,035,181
2017
82,455
895,926
978,380
8,033
1,071,908
14,849
2,073,170
1,691,705
646,388
1,045,317
868,957
78,023
492,677
65,861
89,639
33,015
18,131
286,031
411,804
55,727
356,077
80,873
2,073,170
2018E
82,455
961,819
1,044,274
8,033
1,206,023
14,849
2,273,178
2,170,866
719,476
1,451,389
680,600
78,023
486,391
59,890
70,977
51,362
18,131
286,031
423,225
67,149
356,077
63,165
2,273,178
(INR Million)
2019E
82,455
1,045,720
1,128,175
8,033
1,270,527
14,849
2,421,583
2,670,121
811,530
1,858,591
385,513
78,023
529,884
64,065
78,599
83,057
18,131
286,031
430,428
74,351
356,077
99,456
2,421,583
29 May 2017
4

NTPC
Financials and Valuations
Ratios
Y/E March
Basic (INR)
EPS
Cash EPS
BV/Share
DPS
Payout (%)
Valuation (x)
P/E
Cash P/E
P/BV
EV/EBITDA
Dividend Yield (%)
Return Ratios (%)
RoE
RoIC (Post-tax)
RoCE (Post-tax)
Working Capital Ratios
Debtor (Days)
Inventory (Days)
Payable (Days)
Growth (%)
Sales
EBITDA
PAT
Leverage Ratio (x)
Current Ratio
Interest Cover Ratio
Net Debt/EBITDA
Net Debt/Equity
2013
15.3
19.4
97.5
5.8
37.6
9.3
7.4
1.5
9.2
4.0
16.4
16.0
9.7
30
23
28
5.9
24.3
36.8
2.4
8.7
2.3
0.5
2014
13.8
19.6
105.9
5.8
41.6
8.8
6.2
1.2
8.3
4.7
13.6
13.7
9.4
31
28
33
20.1
15.5
-9.6
2.1
5.5
3.2
0.7
2015
12.1
18.9
99.6
5.8
47.4
12.0
7.7
1.5
12.0
4.0
11.8
11.2
7.4
42
36
32
2.1
-12.8
-12.4
1.8
3.8
5.0
1.0
2016
12.3
19.8
108.2
3.4
27.2
10.5
6.6
1.2
11.1
2.6
11.9
11.9
7.3
47
37
32
-2.4
11.5
1.7
1.5
3.4
5.5
1.2
2017
13.0
20.3
118.7
4.0
30.8
12.4
7.9
1.4
10.8
2.5
11.5
10.9
7.0
40
29
25
4.3
13.9
5.4
1.2
4.8
4.8
1.1
2018E
13.4
22.3
126.6
4.5
33.6
12.0
7.2
1.3
9.8
2.8
10.9
11.1
7.4
30
26
29
3.9
15.4
3.1
1.1
3.8
4.6
1.1
2019E
16.2
27.3
136.8
5.0
30.9
9.9
5.9
1.2
7.8
3.1
12.3
10.9
8.7
30
24
28
13.9
27.3
20.8
1.2
3.3
3.7
1.1
Cash Flow Statement
Y/E March
Profit/(Loss) before Tax
Interest
Depreciation
(Inc)/Dec in WC
Tax paid
others
CF from Operations
Capex
(Pur)/Sale of Investments
Acquisition in subsidiaries
Int. & Dividend Income
Other investing activities
CF from Investments
Inc/(Dec) in Debt
finance cost
Dividend (incl. tax)
Others
CF from Fin. Activity
Inc/Dec of Cash
Add: Beginning Balance
Closing Balance
E: MOSL Estimates
2013
165,786
19,021
33,968
-5,971
-28,956
-28,896
154,952
-162,912
16,225
-12,503
19,021
-140,169
72,624
-39,461
(INR Million)
2014
144,858
31,643
47,700
-13,109
-26,867
-18,917
165,308
-189,485
16,225
0
18,166
18,851
-136,243
93,854
-62,429
2015
104,562
35,286
55,646
-11,694
-20,100
-16,242
147,459
-191,772
16,391
0
17,037
145
-158,200
205,811
-72,371
2016
101,035
41,090
61,534
-36,422
-14,584
1,452
154,106
-232,470
16,536
0
9,528
-16,514
-222,920
80,528
-83,473
2017
137,606
36,511
60,099
307
-30,466
-15,915
188,141
-342,985
0
15,915
-327,069
173,630
-36,511
-39,578
97,541
-41,387
57,369
15,982
2018E
138,855
50,220
73,088
36,055
-28,435
-10,196
259,586
-290,804
0
10,196
-280,608
134,115
-50,220
-44,525
39,370
18,347
15,982
34,330
2019E
167,869
71,897
92,054
-4,595
-34,496
-11,108
281,621
-204,168
0
11,108
-193,060
64,504
-71,897
-49,473
-56,866
31,695
34,330
66,025
-40,688
0
-7,524
7,259
177,643
184,902
-58,719
203
-27,091
1,975
184,902
186,876
-148,385
200
-14,745
-25,486
186,876
161,390
-33,513
1,252
-35,206
-104,021
161,390
57,369
29 May 2017
5

NTPC
Corporate profile
Company description
NTPC is the largest power generator in India with
Installed capacity stands at 45GW and contribute
~30% of generation of the electricity in India. It aims
to add 14GW in 12
th
plan v/s ~9GW addition in 11
th
plan period. It has also ventured into related areas
like coal mining, distribution, transmission, and gas
exploration
Source: MOSL/Bloomberg
Exhibit 1: Sensex rebased
Exhibit 2: Shareholding pattern (%)
Mar-17
Promoter
DII
FII
Others
69.7
17.0
10.4
2.8
Dec-16
69.7
17.4
10.8
2.1
Mar-16
70.0
17.0
10.8
2.3
Source: Capitaline
Exhibit 3: Top holders
Holder Name
LIC OF INDIA
ICICI PRUDENTIAL MUTUAL FUND
NA
NA
NA
% Holding
12.1
1.2
0.0
0.0
0.0
Source: Capitaline
Note: FII Includes depository receipts
Exhibit 4: Top management
Name
GURDEEP SINGH
Kulamani Biswal
Saptarshi Roy
Kalyan Prasad Gupta
Designation
Chairman & Managing Director
Director (Finance)
Director (Human Resources)
Company Secretary
Exhibit 5: Directors
Name
Anand Kumar Gupta
S C Pandey
Gauri Trivedi
Seethapathy Chander
Pradeep Kumar
Name
K K Sharma
A K Jha
Rajesh Jain
Aniruddha Kumar
Source: Capitaline
*Independent
Exhibit 6: Auditors
Name
Agarwal S & Associates
B M Chatrath & Co
Bandyopadhyay Bhaumik & Co
Kalani & Associates
Musib & Co
Type
Secretarial Audit
Statutory
Cost Auditor
Statutory
Cost Auditor
Source: Capitaline
Exhibit 7: MOSL forecast v/s consensus
EPS
(INR)
FY17
FY18
FY19
MOSL
forecast
13.0
13.4
16.2
Consensus
forecast
12.0
13.6
16.7
Variation (%)
8.2
-1.5
-3.1
Source: Bloomberg
29 May 2017
6

NTPC
NOTES
29 May 2017
7

Disclosures
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NTPC
Disclosure of Interest Statement
Analyst ownership of the stock
No
Served as an officer, director or employee -
No
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NTPC
Motilal Oswal Securities Ltd
29 May 2017
Motilal Oswal Tower, Level 9, Sayani Road, Prabhadevi, Mumbai 400 025
Phone: +91 22 3982 5500 E-mail: reports@motilaloswal.com
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