NTPC net rises 2%, to pick banker for SA coal miner purchase

NTPC net rises 2%, to pick banker for SA coal miner purchase

New Delhi: State-run NTPC Ltd, India’s largest power generation utility, said second quarter profit rose 2% to Rs2,151.95 crore, an increase that was narrowed because of a one-time tax refund of Rs531 crore in the same year-ago period.

In a separate development, NTPC said it will shortly appoint a merchant banker as part of its plans to acquire a South African coal mining firm aimed at securing coal supplies for domestic fuel-starved power projects.

“We will appoint a merchant banker within a month through a bid process," said R.S. Sharma, NTPC chairman and manager director.

Mint reported NTPC’s plan to acquire the South African company estimated at $1 billion (Rs4,650 crore), which has an exploration licence for 1 billion tonnes of coal reserves, on 15 September.

Revenue for the quarter ended 30 September rose 11.60% to Rs10,782.79 crore from Rs9,661.42 crore. The utility posted a net profit of Rs2,110.51 crore in the second quarter of 2008-09.

“The results are as per expectations. If we take a look at the adjusted profits of Rs2,251.92 crore in this quarter and compare it to the adjusted profits of Rs1,849.05 crore in the second quarter of last year, you will see an increase of 21.7%," Sharma said. “It should be an apples-to-apples comparison."

NTPC posted a net profit of Rs7,827.40 crore on a revenue of Rs42,182.40 crore in 2008-09.

Fresh coal supplies are critical for NTPC as at least 80% of its installed capacity of 30,644MW is powered by the fuel. With 67% of the total power generation currently based on coal, the power sector is the largest consumer, absorbing nearly 78% of India’s coal production.

NTPC requires 122.94 million tonnes per annum of coal and it expects this to grow further as a substantial portion of the capacity it is adding will be based on coal. NTPC generates 30,644MW of power and plans to add 22,430MW of capacity by 2012.

“The static nature of the profitability of the business is illustrated by the fact that the long-term fuel supply and power purchase agreement gives stability to the revenue and profitability of NTPC," said Gokul Chaudhri, partner at audit and consulting firm BMR Advisors.

NTPC’s stock rose 0.80% to Rs214.65 at the close of trading on the Bombay Stock Exchange on Friday. The exchange’s benchmark equity index, the Sensex, gained 0.13% to 16,810.81 points.