SMC Global recommends NTPC

SMC Global recommends NTPC
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First Published: Tue, Jan 06 2009. 10 49 AM IST
Updated: Tue, Jan 06 2009. 10 49 AM IST
The company plans to put 3,000 MW capacities on commercial generation during the year.
Out of this, 1,000 MW capacity has already been put on commercial generation at Sipat (500 MW) and Kahalgaon (500 MW).
The remaining 2,000 MW to be put under commercial operation will include 2 units of 250 MW each at Bhilai, one unit of 500 MW at Sipat and 2 units of 500 MW each at Kahalgaon.
The company has been on a rapid expansion spree over the past few years, during which, it invested around Rs 23,000 crore in fixed assets.
Since it also generated cash of Rs24,000 crore from operations, it did not have to raise extra cash from other sources. The company plans to invest nearly Rs 13,600 crore during FY09, over and above an investment of Rs 8,200 crore in FY08.
Currently, a capacity of 16,180 mw is under construction, including 3,750 mw in JV companies, which will be completed by FY12. Of this, 2,800 mw will be completed in FY09, which can add about Rs700 crore to the bottomline.
NTPC is planning to use inland waterways to transport imported coal from seaports to its power stations in an effort to limit the transportation costs, for which it has joined hands with Inland Waterways Authority of India.
It ahs also formed a JV with BHEL, incorporated as ‘NTPC BHEL Power Projects Private Limited’ for manufacturing Balance-Of-Plant (BoP) equipments and main-plant equipments. This JV will also operate in the EPC space.
At the current market price of Rs181, stock is trading at 18.81x P/E and 2.60 P/BV FY09E and for FY10E at 17.09x P/E and 2.40 P/BV.
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First Published: Tue, Jan 06 2009. 10 49 AM IST
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