NTPC Beats Estimates Despite Higher Finance Cost And Taxes
Net profit in the second quarter fell to Rs 2,496 crore from Rs 3,039 crore.
Government-run power generation company NTPC Ltd. beat bloomberg consensus estimates despite a 17.9 percent drop in profit in the July to September quarter. Net profit fell to Rs 2,496 crore from Rs 3,039.2 crore in the same quarter last year, the company said in its filing on the stock exchanges. The consensus of analyst estimates tracked by Bloomberg stood at Rs 2,347.3 crore.
The fall can be attributed to higher tax expenses and finance cost. The current tax provisioning for the second quarter stood at Rs 686.5 crore against a write back of Rs 736.4 crore in the corresponding quarter last year. Meanwhile, finance cost also rose by 7.66% to Rs 889.83 crore against Rs 826.52 crore a period ago.
Revenue increased 8.1 percent to Rs 19,398 crore from Rs 17,940 crore, compared to the bloomberg consensus estimates of Rs 17,976 crore. The gross generation during the quarter stood at 60.6 bn units.
Earnings before interest, taxes, depreciation and amortisation rose 31.1 percent to Rs 5,395.8 crore from Rs 4,115.4 crore. The EBITDA margin expanded 487 basis points to 27.8 percent.
The company reported better operational performance boosted by the fall in the fuel expenses and lower employee expenses.
Fuel costs fell 3.2 percent to Rs 11,913 crore. As a percentage of sales, fuel costs declined to 61.9 percent from 65.1 percent last year. Also employee cost declined 5.65 percent to Rs 848.31 crore aided by operational performance of the company.
NTPC’s topline was driven by an 8 percent increase in generation revenues, while operating performance was boosted by the fall in the fuel expenses, Alok Deora, the associate vice president of IIFL Private Wealth told BloombergQuint in an emailed statement.
The improvement in margins was also supported by the decline in employee costs and other costs during the period. While operating performance was robust, the net performance was impacted by higher interest and tax expenses during the quarter.Alok Deora, Associate Vice President, IIFL Private Wealth
NTPC will remain one of the stronger plays in the power generation space owing to its scale of operations and strong linkages in terms of power purchase agreements, Deora added.
Key Highlights From The Concall
- The company has earmarked a capex of Rs 30,000 crore for FY17 and FY18 capex at Rs 28,000 crore
- The company will commercialise 3.75 gigawatt (GW) capacity this year, which excludes the 0.76 GW solar capacity which will also be commercialised this year.
- Domestic coal is cheaper adjusted for transportation
- The company’s debtors have increased on account of some payment issues from J&K.
- Cost rationalisation measures have helped the company bring down its fuel cost, which offset the price hike announced by Coal India and higher rail transportation cost.
- Employee cost came down this quarter due to some extra provisioning measures taken during corresponding quarter of the last year.
- Plant load factor (PLF) at the company’s solar plants was impacted due to the monsoon, however, the company expects it to go up to 20% by the end of FY17.