NTPC — earnings call
The transcript as filed. Every paragraph is addressable: its link names the page and the position it sits at in the call.
Prepared remarks
Moderator · Conference Operator
Ladies and gentlemen, good day, and welcome to Q3 FY24 Earnings Conference Call of NTPC Limited, hosted by IIFL Securities Limited.
As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes.
Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone.
Please note that this conference is being recorded.
I now hand the conference over to Mr. Harsh Dole from IIFL Securities Limited.
Thank you, and over to you, sir.
Harsh Dole
Thanks, moderator.
Greetings, everyone.
I'm Harsh Dole.
On behalf of IIFL Securities, I welcome you all to the 3Q FY24 earnings call of NTPC.
To discuss the performance of the quarter gone by and share the outlook, we have the entire senior management team of NTPC.
I would request Mr. Jaikumar Srinivasan, Director, Finance, to make the opening remarks, subsequent to which the floor will be open for Q&A.
Over to you, sir.
and financial performance. · Operational Highlights of Q3/9M FY24
Operational Highlights of Q3/9M FY24 ➢ As on 31 December 2023, the commercial capacity of NTPC stands at 57838 MW on a standalone basis and 73874 MW for the Group. ➢ NTPC Group generated 315 Billion Units in 9M FY24 as compared to 295 Billion Units in 9M FY23, an increase of 7%.
NTPC’s standalone gross generation in 9M FY24 is 268 Billion Units as compared to 255 Billion Units in the corresponding previous period, an increase of 5% ➢ During 9M FY24, PLF of coal stations of NTPC was 76.40% as against the National Average of 68.51%.
For 9M FY24, 4 coal stations of NTPC group viz.
Bhilai, Korba, Rihand, and Singrauli, were among the top 10 performing stations in the country in terms of PLF. ➢ During the 9M FY24, there has been lower power surrender by beneficiaries due to lower un-requisitioned power of 66 Billion Units against 72 Billion Units in the corresponding previous period.
There was a generation loss due to Fuel Supply of 0.33 Billion Units against 2 Billion Units in the corresponding period of the previous year.
Status of Fuel Supply
➢ During Q3 FY24, materialization of coal against Annual Contracted Quantity was 95% as against 98% in the corresponding previous period. ➢ Coal supply during Q3 FY24 was 62.37 MMT including 2.15 MMT of imported coal.
The coal supply during the corresponding previous period was 54.02 MMT including 1.57 MMT of imported coal. ➢ NTPC Group has registered the highest-ever coal production of 25.36 Million Metric Tonnes (MMT) in 9M FY24 with growth of over 74% as against 14.55 MMT in previous nine months.
A cumulative expenditure of ₹10,612.52 crore has been incurred on the development of coal mines till 31 December 2023.
and financial performance. · Operational Highlights of Q3/9M FY24
➢ Total Income for Q3 FY24 is ₹40,288 crore as against ₹42,149 crore in the corresponding quarter of the previous year.
On a Nine-Month basis, the Total Income is ₹1,21,486 crore as compared to ₹1,24,685 crore in 9M FY23. ➢ PAT for Q3 FY24 is ₹4,572 crore, as against ₹4,476 crore in the corresponding quarter of the previous year, registering an increase of 2.14%.
On nine-month basis, PAT is ₹12,523 crore as against ₹11,524 crore in 9M FY23, registering an increase of 8.66%. ➢ Total Income of the group for 9M FY24 is ₹1,32,349 crore as against ₹1,33,231 crore in the corresponding previous period.
PAT of the group for 9M FY24 is ₹14,842 crore as against the corresponding previous period PAT of ₹12,250 crore, registering an increase of 21.16%. ➢ During Q3 FY24 our subsidiaries earned a profit of ₹1,516 crore as compared to ₹1,290 crore in the corresponding period of the previous year, registering an increase of 17.45%.
NTPC’s share of profit in JVs has increased from ₹481 crore in 9M FY23 to ₹1,424 crore in 9M FY24. ➢ During 9M FY24, we have accounted dividend income of ₹662 crore as against ₹1053 crore during 9M FY23. ➢ We had declared first interim dividend of Rs.2.25 per share for the financial year 2023-24 after second quarter results.
Further, we have declared second interim dividend of Rs.2.25 per share yesterday.
Thus, total interim dividend of Rs.4.50 per share has been declared for the financial year 2023-24.
The regulated equity as on 31 December 2023 was ₹82,094 crore for NTPC on standalone basis and ₹98,712 crore on group basis.
Fund Mobilization ➢ Average rate of interest during 9M FY24 is 6.66% as compared to 6.32% in 9M FY23. CAPEX ➢ The Capital outlay of NTPC Group has been estimated at ₹28,373 crore for FY24. ➢ In 9M FY24, we have incurred a group CAPEX of ₹21,552 crore as compared to ₹26,058 crore in the corresponding previous period.
Further, I would like to list a few other highlights ➢ The NTPC group is deeply committed to advancing Renewable Energy initiatives.
As of now, we have successfully commissioned 3364 MW of Renewable Energy projects.
Currently, an additional 7808 MW of Renewable Energy projects are in various stages of construction.
Moreover, we have 8225 MW of Renewable Energy Projects in the tendering process, and a substantial 3350 MW Equivalent Land Bank, presenting a tangible pipeline of 22747 MW. ➢ As part of our overall energy security plans, we are actively considering awarding thermal capacity of 16.8 GW in near future.
This is in addition to 10 GW thermal capacity already under construction for the group.
Furthermore, to have greater fuel security we are enhancing our coal mining capacity as well and expect to reach an annual production of 50 Million Tonnes in the next 3 years. ➢ On December 15, 2023, MDO contract was awarded for the Badam Coal Mining Project marking a significant milestone as all six coal mining projects of NTPC now have MDO contracts in place. ➢ "Going Higher on Generation, Lowering GHG (Green House Gas) Intensity,” remains our motto for environment management & drives our efforts to comply with new environment norms.
We have taken significant steps to control SOx and NOx emissions.
Over the next 3 years, we plan to commission FGD systems for our entire operational and under-construction capacity, ensuring a substantial reduction in SOx emissions.
65200 MW has been awarded, out of which 5960 MW has already been commissioned & 59240 MW is under implementation. ➢ NTPC Group achieved 300 Billion Unit power generation in FY 2023-24 in record time of 262 days, which is 18 days early as compared to the last financial year. ➢ Erection work for 22 TPD Biomass Pellet Plant at Bhatinda, Punjab has been completed and the project is likely to be commissioned in Q4 of FY 2023-24.
Erection activity for setting up of 50 TPD pellet plant at NTPC Dadri and 100 TPD pellet plant at APCPL Jhajjar are in progress.
Awards received by NTPC in Q3 FY 24 ➢ NTPC received Gold Award for Annual Report at the Corporate Governance Disclosures Competition 2022 organised by the South Asian Federation of Accountants (SAFA).
The annual report of NTPC for the year 2021-22 has been conferred with Gold award (Public Sector Entities Category) under SAFA Best Presented Annual Report Awards, Integrated Reporting Awards & SAARC anniversary awards for corporate governance disclosures competition 2022. ➢ NTPC Coal Mines bagged Star Rating Awards under the Star Rating System instituted by the Ministry of Coal (MOC) to promote green, safe and sustainable mining practices.
NTPC Dulanga Coal Mining Project has been awarded Star Rating Awards (3rd rank) under the category of Open cast mines for the year 2019-20, 2020-21 and 2021-22.
NTPC Talaipalli Coal Mining Project has also been awarded Star Rating (Achievers Rank) under the Open cast category for the year 2019-20. ➢ NTPC has been recognized as one of the “World’s Best Employers 2023” in the Forbes World’s Best Employers list 2023.
It ranked 261st out of top 700 companies in the World ranking and is the only Indian PSU to figure in the list.
This is a testimony that the people practice at NTPC are at par with the top companies in the world.
These were some of the key highlights I wanted to share before we begin with the question-and-answer session.
Thank you.
Moderator · Conference Operator
The next question is from the line of Mohit Kumar from ICICI Securities.
Please go ahead.
Mohit Kumar
Good afternoon, and thanks for the opportunity.
Sir, my first question is, what was the under recovery in the nine months?
And what was this number in H1?
Moderator · Conference Operator
Thank you.
The next question is from the line of Ravikanth from Tara Capital.
Please go ahead.
Ravikanth
Thanks for the opportunity.
Ravikanth Desai.
This is my one small question.
Is there any planning of merger of THDC and NEEPCO in NTPC?
Moderator · Conference Operator
Thank you.
The next question is from the line of Atul Tiwari from Citi.
Please go ahead.
Atul Tiwari
Yes.
Sir, what was the recurring PAT in the quarter, if you could share that number?
Normally, you adjust for some one-off, etc.
Moderator · Conference Operator
Thank you.
The next question is from the line of Puneet Gulati from HSBC.
Please go ahead.
Puneet Gulati
Thank you so much.
Sir, basically, out of the 16.8, the breakup is the 9.6 and 7 GW, right?
That's how one should read in terms of this?
Moderator · Conference Operator
The next question is from the line of Lavina from Jefferies.
Lavina
Just wanted to check again on this slower pace of execution.
Outside of receipt of modules, is there anything on the land acquisition side or certain other fronts maybe delaying the execution?
Just wanted a perspective that your three-year target is in place, your '25-'26 target?
Moderator · Conference Operator
The next question is from the line of Anuj Upadhyay from Investec.
Anuj Upadhyay
Sir, my first question belongs to the under recovery, which you mentioned in nine months, we had around INR740 crores of under recovery, and we target to bring it down.
Any number you want to put or where we would like to end up FY24 figures for the under recovery?
Moderator · Conference Operator
The next question is from the line of Satyadeep Jain from AMBIT Capital.
Satyadeep Jain
First question on renewable energy.
On the 7.8 GW that you're looking at for the next two odd years, given we've seen correction in module prices, and you've finally secured modules, any idea the IRR on these projects that you're looking at?
Would it be better than the projects you already have executed, or could it be better than the existing projects?
That's the first one.
Moderator · Conference Operator
The next question is from the line of Nikhil from Bernstein.
Nikhil
My first question is on pumped storage project.
Last time, we had announced that there's about 14 GW of opportunities under various stages of discussion.
I wanted to check, what is the status on that?
Any progress that has been made on those pumped storage opportunities?
Moderator · Conference Operator
The next question is from the line of Swati Jhunjhunwala from BOB Capital.
Swati
First question is on the coal mining.
So, for 9 months, we have done 20 MMT against our target of 34 million tons for the entire year.
So, is that target still intact or are we revising it?
Moderator · Conference Operator
Thank you.
The next question is from the line of Dhruv from HDFC AMC.
Dhruv
Sir, 10 gigawatt of thermal capacities are already under construction, and 16.8 gigawatt we have to tender in the next 2, 3 years.
That's over and above about 10 gigawatt.
Sir, any status on this 16.8 in terms of the PPAs, the states which are coming up to sign PPAs?
Is there a willingness or just some status there?
Moderator · Conference Operator
The next question is from the line of Akshat Vyas from Reliance Nippon Life Insurance.
Akshat Vyas
Sir, just wanted to know your capex for the next year would be how much?
Moderator · Conference Operator
The next question is from the line of Falguni Dutta from Man Sarovar Financial.
Falguni Dutta
I just have one question.
So, what's your view on the overall demand supply in power for the next 2 years, let's say, if we even include the renewable capacity therein?
Moderator · Conference Operator
The last question is from the line of Aditya Welekar from Axis Securities.
Aditya Welekar
Sir, any colour on the green hydrogen?
There was an announcement yesterday that government of Maharashtra will be putting some INR80,000 crores investment in NTPC Green Energy.
So, how should we see this green hydrogen space shaping up in future?
Moderator · Conference Operator
As that was the last question, I would now hand the conference over to Mr. Harsh Dole from IIFL Securities Limited for closing comments.
Harsh Dole
Thank you.
On behalf of IIFL Securities, I'd like to thank all the participants.
And I'd also like to thank NTPC management for giving us an opportunity to host this call.
Really appreciate, Sir.
Before we conclude the call, would you like to extend any last message?
Moderator · Conference Operator
Thank you.
On behalf of IIFL Securities Limited, that concludes this conference.
Thank you for joining us, and you may now disconnect your lines. ***********************************
Questions and answers
Moderator · Conference Operator
Thank you very much.
The first question is from the line of Anuj, ICICI.
Please go ahead.
Anuj
I just had a couple of questions.
First, if I see your stand-alone P&L, point number 5, profit before regulatory deferral account balances, that seems to have declined both on a quarter-on-quarter basis and on a Y-o-Y basis.
While I understand there is point six as well, which talks about some regulatory deferral account balances, my question is, how should I be looking at the profit?
Should I be looking at profit for the whole period, including regulatory deferral?
And second question is, how do I project this number?
Because this number has been very volatile in the last few quarters.
If I see last year, it was of a loss of about INR1,750 crores, and this quarter, it is a profit of about INR1,466 crores.
So that's point number one.
And second question is if you can just quantify the incentives for this quarter, given that your PAF, the plant availability factor, was down about 6%, 7% from a quarter-on-quarter perspective.
So, these two questions.
Thank you.