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 NTPC Limited Q2 FY25 Earnings Conference Call, hosted by JM Financials.
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. Sudhanshu Bansal from JM Financial.
Thank you, and over to you, sir.
Sudhanshu Bansal
Thank you, Siddhant.
Hello, everyone.
On behalf of JM Financial, I welcome you all to the conference call of NTPC to discuss the Q2 FY25 results.
We have with us the leadership team of NTPC comprising of Shri Jaikumar Srinivasan, Director (Finance); Shri Shivam Srivastava, Director (Fuel); Shri K Shanmugha Sundaram, Director (Projects), Shri Ravindra Kumar, Director (Operations); Shri Anil Kumar Jadli, Director (HR).
Thank you so much, sir, for your kind presence in giving JM Financial the opportunity to host the call.
Friends, before we start the call, I would just like to share one good thing, like amongst the various awards won by the NTPC Limited, it gives me the immense pleasure to inform you that Shri Jaikumar Srinivasan ji, Director (Finance), NTPC Limited has been bestowed with the prestigious leading CFO of the Year Award by CII in a ceremony held on 19th September at Bengaluru.
The award is an acknowledgment of his contribution towards corporate transparency, governance, and financial leadership.
Many congratulations to you Sir.
And with this, I will request Shri Srinivasan ji for the opening remarks and taking the call forward.
Over to you, sir.
Management
Thank you so much.
Am I audible?
Moderator · Conference Operator
Yes, sir, you are audible.
particularly the renewable energy. · I'll share with you a few operational highlights for Q2 and H1 FY25. During H1 FY25 NTPC
I'll share with you a few operational highlights for Q2 and H1 FY25. During H1 FY25 NTPC Group has added 485 MW commercial RE capacity to its portfolio.
As on 30th September 2024, NTPC Limited October 25, 2024 the commercial capacity of NTPC stands at 59,168 MW on a stand-alone basis and 76,443 MW for the group as a whole.
NTPC Group generated 220 billion units in H1 FY25 as compared to 212 billion units in H1 FY24, registering a growth of 3.77%.
NTPC stand-alone gross generation in H1 FY25 was 186 billion units as compared to 179 billion units in the corresponding previous year with a rise of 3.91%.
During H1 FY25, PLF of coal stations of NTPC was 76.31% as against the national average of 70.63%.
Lara station of NTPC with a PLF of 91.63% is the 5th ranked station and Singrauli station with the PLF of 88.83%, is the 13th ranked station in All India PLF Ranking during April-September 2024.
During H1 FY25, materialization of coal against the annual contracted quantity was 97% as against 95.8% in the corresponding previous period.
Coal supply during H1 FY25 was 119.41 million metric tons, including 2.02 million metric ton of imported coal.
The coal supply during the corresponding previous year was 113.47 MMT, including 3.73 MMT of imported coal.
NTPC has registered highest ever coal production of 19.23 million metric ton in H1 FY25 with a growth of over 19.74% as against 16.06 MMT in H1 FY24. Cumulative expenditure of INR11,585 crores have been incurred on the development of coal mines till 30th September 2024.
Now I turn to some of the financial figures.
For NTPC on a stand-alone basis, total income for Q2 FY 25 is INR 41,245 crores as against INR 41,518 crores in the corresponding quarter of previous year.
The lesser revenue is on account of lesser average price of the coal.
The average price of coal was INR 3,791 per ton in the last year.
Now it is INR 3,584, thereby a reduction of INR 207 per ton with a reduction of 5.46%.
Compared to this, the revenue reduction is only 0.66%.
NTPC's profit after tax for Q2 FY25 is INR 4,649 crores as against INR 3,885 crores in the corresponding quarter of previous year, registering an increase of 19.66%.
On a half yearly basis, PAT is INR 9,160 crores as against INR 7,951 crores in H1 FY24, registering an increase of 15.2%.
Total income of the group for H1 FY25 is INR 94,179 crores as against INR 88,775 crores in the corresponding previous period, which signals an increase of 6.09% over previous year.
PAT of the group for H1 FY 25 is INR 10,886 crores as against the corresponding previous period PAT of INR 9,634 crores, registering an increase of 13%.
During H1 FY 25, our subsidiaries earned profit of INR 1,362 crores as compared to INR 1,117 crores in the corresponding period of previous year, registering an increase of 21.91%.
NTPC share of profit in JVs has also increased from INR 1,082 crores in H1 FY24 to INR 1,124 crores in H1 FY25, which is a 3.88% increase over previous year.
During H1 FY25, we have accounted for dividend income of INR 762 crores from our subsidiaries and joint ventures as against INR 541 crores during H1 of FY24. NTPC Limited October 25, 2024 Stand-alone regulatory equity for Power and Mining business as on 30th September 2024 was INR 89,430 crores, which was INR 83,059 crores in the previous year, registering a growth of 7.67%.
On a consolidated basis, the consolidated regulated equity as on 30th September 2024 was INR 105,049 crores, which is 5.5% over last year's figure of INR 99,611 crores.
The Board has declared the first interim dividend of INR 2.50 per share for the financial year 2024-25.
Regarding fund mobilization, NTPC signed a term loan agreement of INR 5,000 crores with HDFC Bank on 31st of May 2024.
The overall average interest rate on borrowings during H1 FY25 was 6.63% as compared to 6.67% in H1 FY24. In H1 FY 25, we have incurred a group capex of INR 17,474 crores as compared to INR 13,204 crores in the corresponding previous period.
While on a stand-alone basis, NTPC has incurred a capex of INR 14,040 crores as compared to INR 7,959 crores in the corresponding previous period.
The capital outlay of NTPC on stand-alone basis has been estimated at INR 22,700 crores for the financial year 2024-25.
Further, I would like to list a few other highlights: - As India aspires to achieve its Net Zero target by 2070, NTPC is also poised to contribute significantly to the energy transition through an optimum combination of renewable energy, energy storage technologies and clean base load generation technologies like nuclear power.
Anushakti Vidhyut Nigam Limited (ASHVINI - a joint venture company of NTPC and Nuclear Power Corporation of India Limited) has been established for commissioning Pressurized Heavy Water Reactor Nuclear Projects.
The Government of India has recently accorded its approval for the transfer of Mahi Banswara nuclear power project (4 x 700MW) to ASHVINI. A wholly owned subsidiary of NTPC Ltd. which will implement Small Modular Reactors (SMRs), Fast Breeder Reactors (FBRs) and Pressurized Water Reactors.
NTPC Group has a strong commitment towards renewable energy.
We have already commissioned 4,013 MW of RE projects.
As you are already aware that we have filed the Draft Red Herring Prospectus for the IPO of NTPC Green Energy Limited on 18th September 2024, and the process is proceeding as planned.
During the “Rising Rajasthan Investor meet” at New Delhi, NTPC Green Energy Limited, a wholly owned subsidiary of NTPC, signed a memorandum of understanding with the Government of Rajasthan.
Subsequently on 17th September 2024, a joint venture agreement with Rajasthan Rajya Vidyut Utpadan Nigam Limited (RVUNL), was signed for development of 25 GW of renewable energy projects and one million metric ton per annum of green hydrogen/ derivatives in the state of Rajasthan.
NTPC Green Energy Limited has entered into a joint venture agreement with the Mahatma Phule Renewable Energy & Infrastructure Technology Limited, (MAHAPREIT), on 25th September NTPC Limited October 25, 2024 2024.
The JV company will undertake development of 10 GW of renewable energy parks and projects in Maharashtra or in any other state of India.
As a part of our overall energy security plans, Investment approval has been accorded for Sipat Super Thermal Power Project, Stage-III (1x 800 MW) and Darlipali Super Thermal Power Project Stage-II (1x800 MW).
EPC contracts for both the projects have been placed.
We are actively considering awarding thermal capacity to the tune of 13.6 GW by the financial year 2026-27.
This is in addition to 11.16 GW thermal capacity already under construction.
Furthermore, to have greater fuel security, we are enhancing our coal mining capacity as well.
It is planned to enhance estimated NTPC Group coal production from 40 million metric ton in FY25 to about 67 million metric tons up to FY29. “Going higher on generation, lowering greenhouse gases intensity” remains our moto for environmental management and drives our efforts to comply with new environmental 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 substantial reduction in SOx emissions .
We have commissioned 14,600 MW and work in FGD package for the cumulative capacity of 49 GW is under progress.
In the areas of ash management, 9 of our stations achieved 100% ash utilization during H1 FY 25 and approximately 245 lakh metric tons of ash has been supplied to various road projects during H1 FY25 as against 215 lakh metric tons in H1 FY24. Our wholly owned subsidiary, NVVN signed a PPA on 3rd October 2024 with Nepal Electricity Authority for the sale of 230-MW of power.A trilateral agreement was also signed between NVVN, NEA and BPDP for the supply of 40 MW of power from Nepal to Bangladesh.
As part of its ongoing sustainability measures to reduce greenhouse gases NTPC stations received 2.62 lakh metric ton of biomass in the first half of FY25, a remarkable increase compared to 0.31 lakh metric tons during the same period last year.
NTPC has been conferred with the Asia's Best Employer Brand Award 2024 at the “Asia's Best Employer Brand Awards” held on 6th August 2024 at Singapore.
Asia's Best Employer Brand Award 2024 features the top organizations from Asia region having exemplary people practices.
NTPC was included in the TIME World's Best Companies 2024, list announced in September 2024.
This award was presented by TIME and Statista, the world-leading statistics portal and industry ranking provider.
The listing was done considering employee satisfaction surveys, revenue growth, environmental and social & corporate governance (ESG) data.
NTPC won three awards at the prestigious Economic Times (ETHRWorld) Future skills Awards 2024.
NTPC received the Generation Company of the Year award in Thermal Category, at the Powering India Awards held on 4th September 2024 in New Delhi.
NTPC Limited October 25, 2024 The Pakri Barwadih coal mining project was honored with 3rd Prize in the Large Opencast Coal Mine category at the 1st Pan-India level Mine Safety Award (MSA-2024).
These were some of the key highlights I wanted to share with all the participants before we begin the question-and-answer session.
Thank you.
Over to you -- over to JM Financials.
Moderator · Conference Operator
Our next question is from the line of Gaurav from Axis Mutual Funds.
Gaurav
Thank you for this opportunity.
I just wanted to ask you about the recent media articles that highlighted that government might consider stopping issuance of new FGD tenders.
Any thoughts around that?
I mean, how will it impact any --will it impact any existing orders that you've given out?
And how do you see this going forward?
Moderator · Conference Operator
Our next question is from the line of Subhadip Mitra from Nuvama.
NTPC Limited October 25, 2024
Subhadip Mitra
My first question is with regard to the deferred revenue.
We've seen a pretty chunky number that has come in this quarter.
If you can throw some light on this particular item and if this is an EBITDA neutral or PBT neutral.
Moderator · Conference Operator
Our next question is from the line of Puneet Gulati from HSBC.
Puneet Gulati
Can you also lay down what is the expected commissioning size on the thermal side for this year and next year?
And how is the progress on those?
Moderator · Conference Operator
Our next question is from the line of Arihant from Bowhead.
Arihant
Sir, please, can you guide what would be the capacity addition in renewables in FY25, FY26 and FY27.
Moderator · Conference Operator
Our next question is from the line of Bharani from Avendus Spark.
Bharani
My question is on the renewable projects on NGEL, in NGEL like where in the details of project wise PPA, whether it has or not is given.
So, there are some projects where there is PPA yet to be signed.
So can you highlight why these projects don't have PPAs, if there are any challenges in signing PPA, what is the way forward?
Moderator · Conference Operator
Our next question is from the line of Satyadeep Jain from AMBIT Capital.
Satyadeep Jain
Couple of questions.
One on thermal.
Recently, some of the project awards we've seen on thermal, the capex figure has gone beyond INR 12 crores per MW.
I just wanted to understand what's driving that increase in capex of some of the new projects?
Moderator · Conference Operator
Our next question is from the line of Vishal Periwal from Antique Stock Broking.
Vishal Periwal
Two questions.
One, in brief initial commentary you mentioned that the NTPC stand-alone interest cost is roughly 6.63%.
So, is it fair to say NTPC Green will have a similar number when we see interest cost come in time?
Moderator · Conference Operator
Our next question is from the line of Mohit Pandey from Macquarie Capital.
Mohit Pandey
Sir, firstly, in the initial remarks, you mentioned INR 22,700 crores as a capital outlay for the parent entity.
What would the corresponding number will be for consol for FY25?
Moderator · Conference Operator
Our next question is from the line of Rajesh Majumdar from B&K Securities.
Rajesh Majumdar
Yes, most of my questions are answered.
I just wanted to ask you that, will the NTPC Green IPO still happen on time in the light of current market conditions?
And what kind of approximate valuation are you looking at in that - a range would do, sir?
Moderator · Conference Operator
Our next question is from the line of Nikhil Nigania from Bernstein.
Nikhil Nigania
I have 2 questions.
My first question was, given the way, at which battery prices have fallen, are we seeing any pushback or delays in signing of PPAs for thermal power plants?
Moderator · Conference Operator
Our next question is from the line of Harshil Shethia from Renaissance Investments.
Please go ahead.
Harshil Shethia
The 60 GW target by FY32 is for the renewable energy capacity, correct?
Moderator · Conference Operator
Our next question is from the line of Amit Bhinde from Morgan Stanley.
Amit Bhinde
Sir, I just wanted to understand the update on pump storage hydro.
And just to clarify, you said in last question, PSP would also be a part of NGEL and not in the NTPC entity?
Moderator · Conference Operator
Our last question is from the line of Rishika from GS.
Please go ahead.
Rishika
I have 2 questions.
First, what was the decline in PLF of coal and gas this quarter?
And second is the 400 capacity addition that we've seen this quarter when compared to the previous one, what is the breakup here between renewable and thermal?
NTPC Limited October 25, 2024
Moderator · Conference Operator
Thank you.
Ladies and gentlemen, that was the last question for the day.
I now hand the conference over to the management for closing comments.
On behalf of JM Financial, 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 sir.
Our first question is from the line of Mohit Kumar from ICICI Securities.
Please go ahead.
Mohit Kumar
Good Afternoon Sir.
Congratulations on a very good quarter and on the prestigious award.
My question is, as the -- first question is on, the one thing I observed is that you're not participating in the RE bid, a very, very selective business.
How do you think about participating in RE.