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Informist, Saturday, Jan. 25, 2025

 

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--Oct-Dec net profit INR 47.11 bln
--Analysts saw NTPC Oct-Dec net profit INR 49.11 bln
--Oct-Dec net profit INR 47.11 bln vs INR 45.72 bln yr ago
--Oct-Dec revenue INR 413.52 bln vs INR 394.55 bln year ago
--To pay INR 2.50 per share interim dividend
--Apr-Dec net profit INR 138.71 bln vs INR 125.23 bln year ago
--Apr-Dec revenue INR 1.261 tln vs INR 1.195 tln year ago
--Oct-Dec operating margin 20.72% vs 20.40% year ago
--Installed capacity 59.17 GW as on Dec 31 vs 57.84 GW year ago
--Commercial capacity 59.17 GW as on Dec 31 vs 57.84 GW year ago
--Apr-Dec average tariff INR 4.68 vs INR 4.57 year ago 
 

 

KOLKATA – A sharp increase in taxes amid muted demand conditions offset NTPC Ltd.'s gains from keeping costs under check, leading the state-owned company to miss the Street's estimates and report a moderate 3.1% on-year rise in net profit for the December quarter to INR 47.1 billion.

 

The revenue, which missed the Street's estimates, rose by 4.8% on year to INR 413.5 billion. It was affected by muted sales growth arising out of macro-economic headwinds. The revenue driver for the company in Oct-Dec was marginal improvement in tariff under muted volume growth. The operating margin for the quarter under review improved to 20.7% from 20.4% in the year ago period.

 

The Street had projected NTPC to report a net profit of INR 49.1 billion and a revenue of INR 419.73 billion for the December quarter.

 

The country's largest power producer reported a sales volume growth of 1.4% on year to 85.1 billion units during Oct-Dec, and gross power generation was up by around 2% on year to 91.3 billion units.

 

Because of tepid market conditions due to government infrastructural projects slowing down, muted manufacturing activities in the country, and an early onset of winter leading to lower power demand, NTPC decided to cut down its power purchase meant for trading in Oct-Dec to lower its costs. At the same time, the company increased its reliance on domestic coal--the primary raw material to generate power, which also was cost accretive. 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.

 

Amid tepid revenue growth, NTPC curtailed its expenses. Finance costs were down by 20.9% on year to a little over INR 22 billion, and cost of electricity purchase for trading fell by 4.1% on year to INR 8.7 billion. Although total costs declined by 1.3% on year to INR 353.2 billion, leading to a higher than reported profit growth, taxes played the spoilsport.

 

NTPC's tax outgo for Oct-Dec rose by 37.3% on year to 19.1 billion which pulled down the profit. The tax component includes a provision of INR 33.2 million for current tax. The profit was further impacted by deferral account balance of INR 3.6 billion.

 

During Oct-Dec, NTPC's plant load factor, which is a measure of how much power a plant generates compared to its maximum capacity, for its coal-based power plants remained flat on year at nearly 76%, and the plant load factor for its gas-based plants declined by 55.7% to 3.4%. The plant load factor for solar power plants rose 8.3% on year to 20.3% and the same for hydel projects rose by 4.2% to 22.1%.

 

In a statement, the Maharatna power producer said that during Apr-Dec, its coal-based power stations achieved a plant load factor of 76.2%, significantly outperforming the sectoral average plant load factor of 67.20% during the first nine months of the current financial year.

 

While NTPC stepped up coal production from its captive mines, its dependence on domestic coal increased further. In the December quarter, NTPC mined nearly 11 million tonnes of coal, up 35.7% on year. Its domestic coal purchase also increased by 8.8% to 65.5 million tonnes. In comparison, imported coal, which is used by the company to primarily blend domestic coal for power generation, declined by 88.8% on year to 240,000 tonnes. In total, the Maharatna power company consumed 65.8 million tonnes of coal, up 5.4% on year.

 

The average tariff, after the monsoons, when power demand remains muted picked up. During Apr-Dec, the average tariff was up by 2.4% on year at INR 4.7 per unit. The growth, however, is on account of base effect as the tariff remained low in the year-ago period.

 

NTPC, which had an installed capacity of 59.2 gigawatts as on Dec 31, up 2.4% on year, billed a total provisional capacity charge for the quarter under review to its buyers at INR 162.3 billion, up by 17.3% on year. Tepid demand resulted in total energy and other charges billed to the power distribution companies falling marginally by 0.5% on year to INR 236.2 billion. These overheads comprise the bulk of its revenue.

 

The capacity charge refers to a fee which power generation companies like NTPC receive to produce electricity even if they aren't currently generating it. It ensures a reliable power supply to the grid during peak demand periods. Such charges are fixed in nature. On the other hand, energy charges, which are variable in nature, are based on fuel costs and operational expenses involved in generating the electricity.

 

For Apr-Dec, NTPC reported a net profit of INR 138.7 billion as against INR 125.2 billion in the year ago period. Revenue for Apr-Dec was INR 1.3 trillion as against INR 1.2 trillion in the year ago period. The company declared an interim dividend of INR 2.50 per share.

 

NTPC announced its results on Saturday. On Friday, the company's shares closed flat at INR 323.6 on the National Stock Exchange.  End

 

Edited by Ashish Shirke

 

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