NTPC
Reco price: Rs 162
Current market price: Rs 155.70
Target price: Rs 217
Upside: 39.4%
Brokerage: Ambit Capital
NTPC is the largest power utility in India with a capacity of 29,394 megawatt (MW), which is expected to increase to 55,865 MW by 2012. The company has been allotted nine coal blocks for captive consumption.
NTPC is the largest power utility in India with a capacity of 29,394 megawatt (MW), which is expected to increase to 55,865 MW by 2012. The company has been allotted nine coal blocks for captive consumption.
NTPC is expected to spend about Rs 14,000 crore on developing the first of the blocks, with commercial production beginning in Q3FY09. Once all the captive blocks are on-stream, NTPC would be able to source about 20 per cent of its annual coal requirement from its captive coal mines. (Presently, 82 per cent of the company's asset portfolio of 29,394 MW is coal-based).
The company is on-track to achieve its capacity additions plans and it would add 2,990 MW in FY09 and 2,511 MW in FY10. NTPC's revenues are expected to grow at 16 per cent CAGR to reach Rs 51,900 crore by FY10, while profits would increase to Rs 9,570 crore, a CAGR of 13.2 per cent. At Rs 162, the stock trades at 14.0x its FY10E earnings and 2.1x FY10E P/BV.
NTPC commands a premium due to low floating stock, being a focused power generator controlling 21 per cent of the total generation capacity in India and on account of regular planned capacity additions in the next few years. Buy.
0 comments:
Post a Comment