Result Flash on NTPC for 4QFY2011

NTPC’s audited results for 4QFY2011 was much better than the provisional results declared by the company earlier. The company’s standalone net sales rose by 25.6% yoy during the quarter to `15,519cr, higher than our estimates of a 12.2% growth. The growth in top-line during the quarter was aided by grossing up of the RoE under the normal tax rate for FY2011 instead of the MAT rate. The company had grossed up its RoE under the MAT rate during 9MFY2011. The growth in top-line is also on account of higher fuel cost, which is a pass-on. Despite the increase in capacity on yoy basis, the company’s generation volumes remained flat during the quarter on yoy basis on account of low PLF. The operating profit rose by 40.6% yoy during the quarter to `4,279cr. The net profit for the company rose by 37.9% yoy to `2,782cr.

For FY2011 as a whole, the company posted a 18.5% yoy increase in standalone net sales to `54,874cr. The OPM was down by 213bp yoy and stood at 28.8%. Fuel costs rose by 20.1% during the year. On the Bottom-line front, the net profit rose 4.3% during the year to `9,103cr. We recommend a Buy on the stock with a target price of `209.

Exhibit: 4QFY2011 Actual v/s Angel estimates

(Rs cr)	Actual	Estimates	Variation (%)
Net Sales	15,519	13,835	12.2
Operating Profit	4,279	3,785	13.1
OPM (%)	26.8	27.4	(58)bp
Rep. Net Profit	2,782	2,216	25.5

Source: Company, Angel Research

Exhibit: 4QFY2011 Performance

Y/E March (Rs cr)	4QFY2011	3QFY2011	% Chg	4QFY2010	% Chg	FY2011	FY2010	% Chg
Net Sales	15,519	13,421	15.6	12,353	25.6	54,874	46,323	18.5
Other Operating Income	461	543	(15.1)	365	26.3	3,486	1,882	85.2
Total Operating Income	15,980	13,964	14.4	12,718	25.6	58,360	48,205	21.1
Fuel Cost	9,726	8,339	16.6	8,346	16.5	35,374	29,463	20.1
(% of Sales)	63	62		68		64	64
Staff Costs	708	689	2.9	746	(5.0)	2,790	2,412	15.6
(% of Sales)	5	5		6		5	5
Other Expenses	1,266	636	99.0	582	117.4	4,400	2,011	118.8
(% of Sales)	8	5		5		8	4
Total Expenditure	11,700	9,664	21.1	9,674	20.9	42,563	33,886	25.6
Operating Profit	4,279	4,300	(0.5)	3,044	40.6	15,796	14,319	10.3
OPM (%)	26.8	30.8		23.9		28.8	30.9
Interest	530	493	7.5	482	10.0	2,149	1,809	18.8
Depreciation	698	599	16.6	732	(4.6)	2,486	2,650	(6.2)
Other Income	206	202	1.7	250	(17.6)	888	1,025	(13.4)
PBT (incl. Extr. Items)	3,257	3,411	(4.5)	2,079	56.6	12,050	10,885	10.7
(% of Sales)	21	25		17		22	23
Provision for Taxation	475	1,039	(54.3)	62	668.7	2,947	2,157	36.6
(% of PBT)	14.6	30		3		24	20
Reported PAT	2,782	2,371	17.3	2,018	37.9	9,103	8,728	4.3
PATM (%)	18	18		16		17	19
EPS (Rs)	3.4	2.9		2.4		11.0	10.6

Source: Company, Angel Research

Note: We will be releasing a detailed result update post the conference call with the management which is scheduled on May 11^th 2011 at 4.00PM IST.