NTPC: Charging up for better days
Subdued electricity demand has hurt the power sector, including state-owned NTPC. Some comfort: When the plant load factor (PLF, or capacity use) for coal power plants in India was 63 per cent in January 2016 (down 150 basis points year-on-year), NTPC’s capacity use was 79 per cent, lower from its January 2015 level of 82 per cent. Of 910 megawatts (Mw) capacities planned to start operations by the March quarter, stage two of NTPC’s Barh Super Thermal Power Station for 660 Mw recently started operations. Incremental capacity additions are critical to improve volumes. About 18,000 Mw of new capacities (under construction) are likely to be commissioned by FY20. Kotak Institutional Equities pegs the asset capitalisation against these projects to be around Rs 130,000 crore, implying an incremental annual profit of Rs 6,200 crore for NTPC.