Earnings Outlook
Subdued power demand seen dimming NTPC's growth in Dec qtr
This story was originally published at 20:29 IST on 23 January 2025
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By Anand JC
MUMBAI – Subdued power demand owing to the early onset of winter may have capped NTPC Ltd.'s earnings growth for the December quarter, as per analysts. The company will disclose its financials for the latest quarter on Saturday.
The state-run power giant's revenue from operations for the December quarter is projected to grow 6.4% on year to INR 419.73 billion, as per an average of six analyst estimates. Sequentially, this would translate to a 4.1% growth. Analysts at Mirae Asset Sharekhan expect NTPC to report a moderate generation and sales growth.
As per reports, energy generation in India during the December quarter moderated to 424 billion units, increasing by a modest 3.2% compared to the same period a year ago. Early winter and economic slowdown likely drove this moderation in energy generation and peak demand during the period, analysts said. Kotak Institutional Equities expects NTPC's power generation in the last quarter to have declined 4% on year due to an unfavourable base in the December quarter of 2023.
As for the bottom line, NTPC's net profit for the trailing December quarter will likely grow 7.4% on year to INR 49.11 billion, according to an average of six analyst estimates. Sequentially, the company's profit after tax may grow 5.6%.
The power generation company functions on a regulated model, which enables it to keep earning irrespective of external scenarios. This ‘regulated equity' ensures the company's profitability remains relatively insulated in the standalone business.
Analysts at Elara Securities (India) Pvt. Ltd. expect NTPC's regulated equity in the December quarter to grow to INR 894 billion, up from INR 821 billion in the same quarter a year ago. As on Sept. 30, NTPC's regulated equity was INR 894.3 billion.
Nuvama Wealth Management Ltd. has forecast a 4-5% year-on-year growth in the profit after tax of the Maharatna enterprise for the December quarter, owing to limited commissioning over the past 12 months. During a conference call at the end of the September quarter, NTPC officials had said the company expects to commission 2.7 gigawatt thermal capacity in 2024-25 (Apr-Mar).
Motilal Oswal Financial Services expects NTPC's adjusted profit for the December quarter to grow 10% on-year. This adjusted bottom line figure excludes prior period items and extraordinary items, the brokerage said in a report. Kotak expects a weak growth in NTPC's profit in Oct-Dec, considering prior period sales of INR 1.2 billion in the December quarter of 2023.
NTPC may report earnings before interest, taxes, depreciation, and amortisation of INR 114.21 billion for the December quarter, as per an average of five analyst estimates. This would mean a 14.9% on-year and 18% sequential growth.
NTPC reported its September quarter earnings on Oct. 24 post market hours. Between Oct. 25 and Jan. 23, shares of the company have depreciated nearly 20%. On Thursday, shares of NTPC closed at INR 323.65 on the National Stock Exchange, up 0.4%.
Following are the Oct-Dec earnings estimates for NTPC Ltd. based on reports from six brokerage firms in descending order of estimates of net profit:
| Brokerage | Net sales (in INR mln) | Net profit (in INR mln) | EBITDA (in INR mln) |
| Sharekhan Ltd | 4,51,000 | 56,100 | NA |
| JM Financial Institutional Securities Pvt Ltd | 4,51,719 | 49,939 | 1,19,797 |
| Motilal Oswal Financial Services Ltd | 3,97,208 | 47,873 | 1,17,113 |
| Nuvama Wealth Management Ltd | 4,05,627 | 47,470 | 1,23,277 |
| Elara Securities (India) Pvt Ltd | 4,13,164 | 47,398 | 1,08,918 |
| Kotak Institutional Equities | 3,99,688 | 45,863 | 1,01,923 |
| Average | 4,19,734.3 | 49,107.2 | 1,14,205.6 |
End
Edited by Deepshikha Bhardwaj
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