NTPC Shares Rise Over 1% As Revenue from Operations Climbs 3%

Mumbai, July 27: NTPC Ltd (NTPC) shares are trading higher on Monday afternoon, reacting to the state-owned power major’s first quarter earnings posted late Friday after market hours.  

The stock jumped to an early gap-high open at Rs 353.00 versus Friday’s close at Rs 347.20 and traded at an intraday high of Rs 353.00 at the opening bell. It has since pared some gains, falling to an intraday low of Rs 347.80 so far. The VWAP currently stands at Rs 350.43. The stock was last trading at Rs 351.35 up Rs 4.15 or 1.20 percent from the previous close, after having traded at Rs 351.05, up Rs 3.85 or 1.11 percent, as some of its gains gave up late into the morning session.  

The order book for NTPC on the exchange had more sellers than buyers at last check, with 57.62 percent of the total amount of pending orders, equal to 9,65,911 shares, on the offer side versus 42.38 percent or 7,10,411 shares on the bid side, indicating some profit taking pressure on the stock despite holding on to most of its opening gain so far today.  

Weekly Trend  

Analysing how the stock has behaved during the past week, the stock had moved up gradually from around Rs 347 level at the beginning of the week to reach a high just below Rs 350 level by Wednesday before falling back to give up those gains over the next two sessions to close Friday’s session almost at the levels it opened the week, around Rs 347.20. Monday’s opening jump driven by its results announced after markets closed Friday takes the stock past last week’s high for the period already.  

WHAT THE Q1 RESULTS SAY  

NTPC said standalone net profit rose 11.9 percent year-on-year to Rs 5,342.4 crore in the quarter ended June 30, against Rs 4,774 crore in the year-ago quarter, driven by higher revenue and improved operational efficiency. Revenue from operations increased 3 percent to Rs 43,832 crore while EBITDA surged to Rs 12,600 crore from Rs 10,280 crore in the year ago quarter, driving a significant improvement in margins.  

Net profit after including minority interests, or consolidated/group net profit was up 12.8 percent at Rs 6,896 crore for the quarter.  

NTPC’s thermal plants witnessed a plant load factor (PLF) of 76.71 percent during the quarter, significantly higher than the industry average PLF of around 63 percent, highlighting how well the state-run power generator continues to operate its plants versus peers in the sector. Plant load factor is a measure of how well a plant is utilised against its capacity.  

EBITDA grew sharply even as fuel and other input costs have remained flat during the quarter. Higher revenue contributed to a modest 3 percent sequential rise in revenue from operations while a stable input cost environment allowed the company to translate into operating profits what would have otherwise been a more modest rise in revenue.  

Analysts said this shows just how much higher NTPC’s plant utilisation remains versus others in the sector. Industry experts tracking the power sector said higher plant utilisation for NTPC, even during a quarter which is typically soft for power demand shows steady availability of both coal and gas for NTPC as well as the company adhering to disciplined maintenance schedules for its thermal fleet during the quarter.  

Analysts and investors are likely to tune in for comments from management on the company’s capacity addition plans as well as further details on how management plans to accelerate growth of NTPC’s renewable energy business via its subsidiaries as the company continues to look to build out its clean energy business alongside its traditional business of thermal power generation.  

Investors and analysts are likely to keep a close watch on the counter through the week as its improved profitability and stable plant utilisation through the quarter could see the counter outperform broader market moves as well. Broader market sentiment will be influenced by how the Iran-US conflict unfolds and quarterly earnings announcements by other index heavyweights through the week. Brokerages will likely update their price targets on the stock based on its better-than-expected performance with the stock’s performance on Monday already factoring in some of that rating updation.  

Source

• https://www.nseindia.com/get-quote/equity/NTPC/NTPC-Limited