NTPC: Powerplay

STOCKS IN THE NEWS

The stock hit an all-time high of Rs 163 on Thursday after the company announced it provisional results for 2006-07, posting 16 per cent growth in net profit. The stock made a weekly gain of 9 per cent at Rs 158.75 with the weekly volumes on the BSE and the NSE moving up three-fold from 11.10 million shares to 35.33 million shares.

The provisional net profit increased to Rs 6,726.40 crore in FY07 compared with Rs 5820.20 crore in FY06. Sales rose 17.20 per cent to Rs 30,638.7 crore. The year-on-year growth in net profit was 5 per cent below analyst estimate and was a disappointing after growing 19.5 per cent in the first nine months of fiscal 2007. However, NTPC has proposed a capital expansion plan of Rs 12,790 crore for the financial year 2008. In FY07, the capital expenditure was Rs 7800 crore.

Analyst are not much concerned about the weak fourth quarter as the future holds good. Capacity is being increased two-fold in five years and three-fold in 10 years. NTPC aims to double its capacity to 50,000 mw by FY12E and triple capacity to 75,000 mw by FY17E. Its capex is well funded with low current gearing and has high current cash levels of Rs 8,470 crore.