INTRODUCTION
India’s largest power company, NTPC was set
up in 1975 to accelerate power development in India. NTPC is emerging as a
diversified power major with presence in the entire value chain of the power
generation business. Apart from power generation, which is the mainstay of the
company, NTPC has already ventured into consultancy, power trading, ash
utilisation and coal mining.
The total installed capacity of the company
is 43,143 MW (including JVs) with 17 coal based and 7 gas based stations, 7
joint ventures stations are coal based and 8 renewable energy projects. As
per new corporate plan, NTPC envisages to have an installed capacity of 128 GW
by the year 2032 with a well-diversified fuel mix comprising 56% coal, 16% gas,
11% nuclear energy, 9% renewable energy and 8% hydro power based capacity. By
then, non-fossil fuel based generation capacity shall make up nearly 28% of
NTPC’s portfolio.
NTPC has been operating its
plants at high efficiency levels. Although the company has 17.73% of the total
national capacity, it contributes 25.91% of total power generation due to its
focus on high efficiency.
NTPC
became a listed company in November 2004 with the Government holding 89.5% of
the equity share capital. At present GOI's
holding in NTPC is 75%. The rest is held by Institutional Investors and Public.
BUSINESS DEVELOPMENT
NTPC has adopted a
multi-pronged strategy such as Greenfield Projects, Brownfield Projects, Joint
Venture and Acquisition route. Apart from this, NTPC has also adopted the
Diversification Strategy in related business areas, such as, Coal Mining, Power
Trading & Manufacturing to ensure robust growth of the company.
JVs
Capacity
Addition
|
Name
|
Promoters
|
Objective
|
|
NTPC-SAIL POWER COMPANY (PVT)
LTD (NSPCL)
|
NTPC: 50%
SAIL: 50%
|
To own and operate captive power plants for SAIL’s
steel manufacturing facilities located at Durgapur, Rourkela and Bhilai. To
undertake expansion of Bhilai plants.
|
|
NTPC TAMILNADU ENERGY COMPANY
LIMITED
|
NTPC: 50%
TNEB : 50% |
To set up a 1500 MW coal based power station at vallur,
Ennore in Tamil Nadu utilising the existing infrastructure facility at Ennore
and supply power mainly to Tamil Nadu and the states of Kerala, Karnataka and
Pondicherry.
|
|
ARAVALI POWER COMPANY PRIVATE
LTD
|
NTPC-50%, IPGCL-25%, HPGCL-25%
|
To set up a coal-based power station of 1500MW capacity
in Distt. Jhajjar, Haryana, in joint venture with IPGCL and HPGCL to supply
power to Delhi and Haryana.
|
|
RATNAGIRI GAS & POWER
PVT. LIMITED
|
NTPC: 30.17%
GAIL: 30.17% IFIs: 21.77% (ICICI: 10.65%, SBI: 7.14%, CANARA BANK: 1.87%) MSEB HOLDING CO. LTD.: 17.89% |
To own and operate the assets of the erstwhile Dhabol
Power Company ( 1967 MW) and 5 MMTPA LNG Re-gasification Terminal
|
|
NABINAGAR POWER GENERATING
CO. PVT. LTD.
|
NTPC: 50%
BSEB: 50% |
To set up 3x660 MW Thermal Power Plant at New
Nabinagar, Bihar and operation & maintenance thereof
|
Services
|
Name
|
Promoters
|
Objective
|
|
NTPC -ALSTOM POWER SERVICES
PVT. LTD. (NASL)
|
NTPC: 50%
ALSTOM POWER GENERATION: 50%
|
Undertake Renovation & Modernisation of power
stations in India and other SAARC countries
|
|
UTILITY POWER TECH LTD
|
NTPC: 50%
RELIANCE INFRASTRUCTURE LTD : 50% |
To undertake project construction, erection and supervision
in power sector and other sectors in India and abroad
|
Power Trading &
Power Exchange
|
Name
|
Promoters
|
Objective
|
|
NATIONAL POWER EXCHANGE
LTD.(NPEX)
|
NTPC: 16.67%
NHPC :16.67% PFC: 16.66% TCS: 19.04% BSE: 16.66 % IFCI: 5.72 % MEENAKSHI: 4.77 % DPSC: 3.81 % |
To facilitate nation - wide trading of all forms of
contract for buying and selling of all forms of electrical energy for
clearing and settlement of trade in a transparent, fair and open manner.
|
Coal Mining
|
Name
|
Promoters
|
Objective
|
|
NTPC – SCCL GLOBAL VENTURES
PRIVATE LTD
|
NTPC: 50%
SCCL: 50%
|
To jointly undertake Development and O & M of Coal
Blocks(s) and Integrated Coal based Power Projects in India and overseas.
|
|
INTERNATIONAL COAL VENTURES
PVT. LIMITED (ICVL)
|
NTPC: 14.28%
NMDC: 14.28% RINL: 14.28% CIL: 28.58% SAIL: 28.58% |
For procurement of metallurgical coking coal and
thermal coal from overseas & acquisition of coal assets abroad
|
Manufacturing &
Supply of Equipment
|
Name
|
Promoters
|
Objective
|
|
NTPC-BHEL POWER PROJECTS
PVT.LTD
|
NTPC: 50%
BHEL: 50%
|
To explore, secure and execute EPC contracts for Power
plants and other Infrastructure projects in India and abroad.
To engage in manufacturing and supply of equipment for power plants and other infrastructure projects in India and abroad. |
|
ENERGY EFFICIENCY SERVICES
LTD. (EESL)
|
NTPC: 25%
PFC: 25% POWERGRID: 25% REC: 25% |
To carry out and promote the business of Energy
Efficiency, Energy Conservation and Climate Change including manufacture and
supply of energy efficiency services and products.
|
|
CIL-NTPC URJA PRIVATE LIMITED
(CNUPL)
|
NTPC: 50%
CIL: 50% |
Development of Brahmini & Chichro Patsimal coal
mine blocks for meeting coal requirement of Farakka and Kahalgaon expansion
projects of NTPC.
|
|
ANUSHAKTI VIDHYUT NIGAM
LIMITED (ASHVINI)
|
NPCIL: 51%
NTPC: 49% |
Setting up of nuclear power projects
|
ACQUISITIONS
|
Power Station taken over
|
Year
|
Original Owner
|
|
2x210 MW FEROZE GANDHI UNCHAHAR THERMAL POWER STATION
|
1991
|
UP Rajya Vidyut Utpadan Nigam Limited
|
|
4x60 MW +2x110 MW TALCHER THERMAL POWER STATION
|
1995
|
Orissa State Electricity Board
|
|
4x110 MW TANDA THERMAL POWER
STATION
|
2000
|
UP Rajya Vidyut Utpadan Nigam Limited
|
|
705MW BADARPUR THERMAL POWER
STATION
|
2006
|
Central Electricity Authority
|
DIVERSIFICATION
To broad-base the business and also to ensure
growth, diversification in the areas related to NTPC's core business of power
generation such as Hydro power, Distribution, Trading, Coal mining, LNG etc.
have been identified as priority areas.
The policy changes in coal sector provides an
opportunity to NTPC to enter captive coal mining business. Production is
expected by 2015 in Pakri Barwadih in the state of Jharkhand. Ten blocks have
been allotted to NTPC.
In addition to development of its own
domestic coal mines NTPC is exploring various other options including
acquisition of stake in coal mines abroad for sourcing of thermal coal for
addressing fuel security concerns.
OPERATIONS
INSTALLED
Present installed capacity
of NTPC is 43,143 MW (including 5,974 MW through JVs) comprising of 38 NTPC
Stations (17 Coal based stations, 7 combined cycle gas/liquid fuel based
stations), 7 Joint Venture stations (6 coal based and one gas based) and 8
renewable energy projects.
|
|
No. of plants
|
Capacity (MW)
|
||
|
NTPC Owned
|
||||
|
Coal
|
17
|
33015
|
||
|
Gas/
Liquid fuel
|
7
|
4017
|
||
|
Renewable
Energy Projects
|
8
|
110
|
||
|
Total
|
32
|
37142
|
||
|
Owned byJVs
|
||||
|
Coal
|
6
|
4034
|
||
|
Gas
|
1
|
1967
|
||
|
Total
|
7
|
6001
|
||
|
Total
|
39
|
43143
|
||
UNDER IMPLEMENTATION
|
Hydro Based
|
State
|
Approved Caspacity
|
|
Koldam (HEPP)
|
Himachal Pradesh
|
800
|
|
Tapovan Vishnugad (HEPP)
|
Uttarakhand
|
520
|
|
Singrauli CW Discharge
|
Uttar Pradesh
|
8
|
|
Lata Tapovan
|
Uttarakhand
|
171
|
|
Total
|
1499
|
|
STRENGTHS AND OPPORTUNITIES
It is very efficient and a well-established company.
It is a Maharatna company, which means having high
flexibility and freedom in decision making.
There is a high potential of growth, as India is an
emerging economy and its energy demand is increasing continuously.
It is a public company and operates at a very large
scale. And the major business is power generation and in India where it
operates is the place where demand is higher than the supply so there is no
direct competition.
WEAKNESS AND THREATS
Its
dependency on availability of coal is the biggest threat.
It has
the threat of bureaucracy as being a PSU
FINANCIALS
Statement of Profit and Loss
The Company has been experiencing a sales
growth of 6% and 9.6% from the previous 2 years (2013 and 2014). Involved in
Power generation, the fuel expenses (62% to 67% of the total Revenues) form
majority of the expenses in operations. The Employee benefit expenses vary from
5% to 5.3% in the past 5 years (% of Revenues). The General and Administration
expenses form 4 to 9% of the Revenues. Both the Depreciation and finance cost
has been around 4% respectively. The Company has been earning an After tax
margin of 20% (25% in the year 2013). NTPC has succeeded in maintaining PAT of
15% to 20% over the past 5 years.
|
(in crores)
|
2010
|
2011
|
2012
|
2013
|
2014
|
|
Particulars
|
|||||
|
Revenue
|
|||||
|
Revenue from Operations
|
46568.48
|
55340.66
|
62480.88
|
66263.35
|
72644.02
|
|
Less: Electricity Duty
|
245.89
|
278.01
|
428.65
|
526.31
|
625.09
|
|
Revenue from Operations (Net)
|
46322.59
|
55062.65
|
62052.23
|
65737.04
|
72018.93
|
|
Other income
|
2924.06
|
2344.65
|
2789.65
|
3118.77
|
4913.61
|
|
Total Revenue
|
49246.65
|
57407.30
|
64841.88
|
68855.81
|
74707.82
|
|
Expenses
|
|||||
|
Fuel
|
29462.74
|
35373.78
|
41635.46
|
41018.25
|
45829.71
|
|
Employee benefit expense
|
2412.36
|
2789.71
|
3101.71
|
3415.96
|
3867.96
|
|
General, Administration and other expenses
|
2094.03
|
4926.28
|
3588.79
|
4235.68
|
4543.85
|
|
Prior Period items (Net)
|
-77.83
|
-1638.72
|
-313.58
|
-29.72
|
12.84
|
|
Total Expenses
|
33891.30
|
41451.05
|
48012.38
|
48640.17
|
54254.36
|
|
EBITDA
|
15355.35
|
15956.25
|
16829.50
|
20215.64
|
20453.46
|
|
Depriciaton and Amortization
|
2650.06
|
2485.69
|
2791.70
|
3396.76
|
4142.19
|
|
EBIT
|
12705.29
|
13470.56
|
14037.80
|
16818.88
|
16311.27
|
|
Profit before tax
|
10885.46
|
12049.60
|
12326.16
|
16578.63
|
13904.68
|
|
Total tax expense
|
2157.26
|
2947.01
|
3102.43
|
3959.24
|
2929.91
|
|
Profit for the year
|
8728.20
|
9102.59
|
9223.73
|
12619.39
|
10974.77
|
Balance Sheet
There has been no change in the share capital
of the company. The company has the Days Payables outstanding of 53 days (46
days in 2013) in comparison with inventory days of 43 Days (36 days in 2013) and
Days Sales outstanding of 25 Days (28 days in 2013). There has been a gradual
decline in the current ratio from 2.57 (2011) {2.17 (2012), 1.81 (2013)} to
1.58 (2014). The intangibles form a negligible part of the Total assets of the
Company. The Company has been consistently reducing its current, liquid and
cash ratio, thereby holding lesser amounts of cash in current assets.
|
2011
|
2012
|
2013
|
2014
|
|
|
EQUITY AND LIABILITIES
|
||||
|
Shareholders' funds
|
||||
|
Share capital
|
8245.46
|
8245.46
|
8245.46
|
8245.46
|
|
Reserves and surplus
|
59646.79
|
65045.71
|
72142.05
|
77569.86
|
|
67892.25
|
73291.17
|
80387.51
|
85815.32
|
|
|
Deferred revenue
|
854.48
|
1430.06
|
1244.05
|
1609.88
|
|
Non current liabilities
|
42951.11
|
48877.93
|
56878.72
|
66849.18
|
|
Current liabilities
|
||||
|
Trade payables
|
4088.01
|
4460.65
|
5132.39
|
6633.34
|
|
Other current liabilities (Borrowings)
|
4370.67
|
4892.42
|
4764.42
|
|
|
Other current liabilities
|
7762.50
|
9537.24
|
10469.25
|
6579.44
|
|
Short term provisions
|
2190.53
|
3233.69
|
7004.54
|
7302.60
|
|
14041.04
|
17231.58
|
22606.18
|
25279.80
|
|
|
TOTAL
|
125738.88
|
140830.74
|
161116.46
|
179554.18
|
|
Debt-Equity ratio
|
0.59
|
0.69
|
0.72
|
0.78
|
|
ASSETS
|
||||
|
Non current assets
|
||||
|
Fixed Assets
|
||||
|
Net Tangible assets
|
39029.07
|
45044.47
|
62687.42
|
71865.86
|
|
Net Intangible assets
|
206.89
|
211.89
|
248.68
|
244.97
|
|
Non current investments
|
10532.84
|
9583.92
|
9137.64
|
8120.90
|
|
Long term loans and advances
|
3901.96
|
5394.35
|
9633.41
|
12776.22
|
|
Other non-current assets
|
459.15
|
1371.88
|
1491.19
|
1786.77
|
|
89625.24
|
103434.37
|
120307.76
|
139683.39
|
|
|
Current assets
|
||||
|
Current investments
|
1812.00
|
1622.46
|
1622.46
|
1636.96
|
|
Inventories
|
3639.12
|
3702.85
|
4057.19
|
5373.35
|
|
Trade receivables
|
1434.96
|
5832.51
|
5365.00
|
5220.08
|
|
Cash and bank balances
|
16185.26
|
16141.83
|
16867.70
|
15311.37
|
|
Short term loans and advances
|
3777.86
|
1543.32
|
1745.57
|
3117.08
|
|
Other current assets
|
9264.44
|
8553.40
|
11150.78
|
9211.95
|
|
36113.64
|
37396.37
|
40808.70
|
39870.79
|
|
|
TOTAL
|
125738.88
|
140830.74
|
161116.46
|
179554.18
|
Summarized Balance
Sheet
Valuation
Discounted cash flow method was used for
calculating the value of the equity share. The calculated intrinsic value of
the share comes out to be Rs. 159.72. The Current Market price is Rs. 140.
Projected Profit and Loss Statement
|
Growth Rate
|
|
|
|
|
|
|
|
(in crores)
|
2015
|
2016
|
2017
|
2018
|
2019
|
Terminal
|
|
Particulars
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
Revenue from Operations
|
77002.66
|
83162.87
|
93142.42
|
102456.66
|
112702.33
|
118337.44
|
|
Less: Electricity Duty
|
662.60
|
715.60
|
801.48
|
881.62
|
969.79
|
1018.27
|
|
Revenue from Operations (Net)
|
76340.07
|
82447.27
|
92340.94
|
101575.04
|
111732.54
|
117319.17
|
|
Other income
|
2688.89
|
2688.89
|
2688.89
|
2688.89
|
2688.89
|
2688.89
|
|
Interest from loans and investments
|
2086.47
|
2086.47
|
2086.47
|
2086.47
|
2086.47
|
2086.47
|
|
Dividend from investments
|
138.25
|
138.25
|
138.25
|
138.25
|
138.25
|
138.25
|
|
|
|
|
|
|
|
|
|
Total Revenue
|
79028.96
|
85136.16
|
95029.83
|
104263.93
|
114421.43
|
120008.06
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
Fuel
|
48579.49
|
52465.85
|
58761.75
|
64637.93
|
71101.72
|
74656.81
|
|
Employee benefit expense
|
4100.04
|
4428.04
|
4959.41
|
5455.35
|
6000.88
|
6300.92
|
|
General, Administration and other expenses
|
4816.48
|
5201.80
|
5826.02
|
6408.62
|
7049.48
|
7401.95
|
|
Prior Period items (Net)
|
0.00
|
0.00
|
0.00
|
0.00
|
0.00
|
0.00
|
|
Total Expenses
|
57496.01
|
62095.69
|
69547.18
|
76501.89
|
84152.08
|
88359.69
|
|
EBITDA
|
21532.94
|
23040.47
|
25482.66
|
27762.04
|
30269.35
|
31648.37
|
|
Depriciaton and Amortization
|
4654.10
|
5119.50
|
5631.45
|
6194.59
|
6814.04
|
7495.44
|
|
EBIT
|
16878.85
|
17920.97
|
19851.21
|
21567.45
|
23455.31
|
24152.93
|
|
Profit before tax
|
14374.58
|
15312.65
|
17126.51
|
18715.57
|
20464.37
|
21019.16
|
|
Total tax expense
|
3028.92
|
3226.59
|
3608.79
|
3943.63
|
4312.13
|
4429.03
|
|
Profit for the year
|
11345.66
|
12086.06
|
13517.72
|
14771.94
|
16152.24
|
16590.13
|
Projected Balance Sheet
|
Growth
Rate
|
|
|
|
|
|
|
|
2015
|
2016
|
2017
|
2018
|
2019
|
Terminal
|
|
|
EQUITY AND LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' funds
|
|
|
|
|
|
|
|
Share capital
|
8245.46
|
8245.46
|
8245.46
|
8245.46
|
8245.46
|
8245.46
|
|
Reserves and surplus
|
81283.38
|
85239.24
|
89663.68
|
94498.65
|
99785.40
|
105215.47
|
|
89528.84
|
93484.70
|
97909.14
|
102744.11
|
108030.86
|
113460.93
|
|
|
Deferred revenue
|
1609.88
|
1609.88
|
1609.88
|
1609.88
|
1609.88
|
1609.88
|
|
Non current liabilities
|
|
|
|
|
|
|
|
Long term borrowings
|
65106.26
|
67983.00
|
71200.50
|
74716.53
|
78561.11
|
82509.91
|
|
Deferred tax liabilities (net)
|
1051.61
|
1051.61
|
1051.61
|
1051.61
|
1051.61
|
1051.61
|
|
Other long term liabilites
|
2512.46
|
2512.46
|
2512.46
|
2512.46
|
2512.46
|
2512.46
|
|
Long term provisions
|
879.36
|
879.36
|
879.36
|
879.36
|
879.36
|
879.36
|
|
69549.69
|
72426.43
|
75643.93
|
79159.96
|
83004.54
|
86953.34
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
Trade payables
|
7031.34
|
7593.85
|
8505.11
|
9355.62
|
10291.18
|
10805.74
|
|
Other current liabilities (Borrowings)
|
4970.59
|
5190.22
|
5435.86
|
5704.30
|
5997.81
|
6299.29
|
|
Other current liabilities
|
6579.44
|
6579.44
|
6579.44
|
6579.44
|
6579.44
|
6579.44
|
|
Short term provisions
|
7302.60
|
7302.60
|
7302.60
|
7302.60
|
7302.60
|
7302.60
|
|
25883.97
|
26666.11
|
27823.01
|
28941.96
|
30171.04
|
30987.07
|
|
|
TOTAL
|
186572.38
|
194187.11
|
202985.97
|
212455.91
|
222816.32
|
233011.23
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Non current assets
|
|
|
|
|
|
|
|
Fixed Assets
|
|
|
|
|
|
|
|
Gross Block Tangible
|
128271.65
|
141098.81
|
155208.70
|
170729.56
|
187802.52
|
206582.77
|
|
Depreciation
|
4654.05
|
5119.45
|
5631.40
|
6194.54
|
6813.99
|
7495.39
|
|
Accumlated Depreciation
|
49398.78
|
54518.23
|
60149.63
|
66344.18
|
73158.17
|
80653.56
|
|
Net Tangible assets
|
78872.87
|
86580.58
|
95059.06
|
104385.39
|
114644.35
|
125929.21
|
|
Gross Intangibles
|
381.47
|
381.47
|
381.47
|
381.47
|
381.47
|
381.47
|
|
Depreciation
|
0.05
|
0.05
|
0.05
|
0.05
|
0.05
|
0.05
|
|
Accumlated Depreciation
|
136.55
|
136.59
|
136.64
|
136.68
|
136.73
|
136.77
|
|
Net Intangible assets
|
244.92
|
244.88
|
244.83
|
244.79
|
244.74
|
244.70
|
|
Capital work-in-progress
|
44886.74
|
44886.74
|
44886.74
|
44886.74
|
44886.74
|
44886.74
|
|
Intangible assets under development
|
0.00
|
0.00
|
0.00
|
0.00
|
0.00
|
0.00
|
|
Total Net Block
|
124004.53
|
131712.20
|
140190.63
|
149516.92
|
159775.84
|
171060.65
|
|
Non current investments
|
8120.90
|
8120.90
|
8120.90
|
8120.90
|
8120.90
|
8120.90
|
|
Long term loans and advances
|
12776.22
|
12776.22
|
12776.22
|
12776.22
|
12776.22
|
12776.22
|
|
Other non-current assets
|
1786.77
|
1786.77
|
1786.77
|
1786.77
|
1786.77
|
1786.77
|
|
146688.42
|
154396.09
|
162874.52
|
172200.81
|
182459.73
|
193744.54
|
|
|
Current assets
|
|
|
|
|
|
|
|
Current investments
|
1636.96
|
1636.96
|
1636.96
|
1636.96
|
1636.96
|
1636.96
|
|
Inventories
|
5695.75
|
6151.41
|
6889.58
|
7578.54
|
8336.39
|
8753.21
|
|
Trade receivables
|
5522.01
|
5948.74
|
6640.05
|
7285.26
|
7995.00
|
8385.36
|
|
Cash and bank balances
|
14700.20
|
13724.88
|
12615.83
|
11425.31
|
10059.21
|
8162.13
|
|
Short term loans and advances
|
3117.08
|
3117.08
|
3117.08
|
3117.08
|
3117.08
|
3117.08
|
|
Other current assets
|
9211.95
|
9211.95
|
9211.95
|
9211.95
|
9211.95
|
9211.95
|
|
39883.95
|
39791.02
|
40111.44
|
40255.10
|
40356.59
|
39266.69
|
|
|
TOTAL
|
186572.38
|
194187.11
|
202985.97
|
212455.91
|
222816.32
|
233011.23
|
About the Authors
This report has been prepared by Sreyas Thacker and Atul Mantri. Both of them are pursuing MBA at Institute of Management, Nirma University, Ahmedabad, Gujarat, India.
Disclaimer
This document is solely for personal information
of the recipient, and must not be singularly used as the basis of any
investment decision. Nothing in this document should be construed as investment
or financial advice. Each recipient of this document should make such
investigations as they deem necessary to arrive at an independent evaluation of
an investment in the securities of the companies referred to in this document
(including the merits and risks involved), and should consult their own
advisors to determine the merits and risks of such an investment.
The information in this document has been printed on
the basis of publicly available information, internal data and other reliable
sources believed to be true, but we do not represent that it is accurate or
complete and it should not be relied on as such, as this document is for
general guidance only.
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