Buy NTPC - Emkay

Reco: BUY
CMP: Rs 172
Target Price: Rs 204

90%+ PAF structurally coming down; maintain Buy

- 3Q12 PAT of Rs21.3bn is below est. due to higher R&M expenses & under recovery on water charges. Adjusted net profit stood at Rs21.7bn (assuming PY sales as recurring).

- Has commissioned 1320MW (Sipat) and commercialized 1,160MW in YTD12. Mgmt has retained its capacity addition target.

- Highlights - (1) PAF of coal plants low at 85.3% and 86.2% for 3Q12 and 9M12 period and (2) Revised PAF and COD assumption, FY12E/FY13E EPS reduced by 3.4%/3.9%.

- Valuations still remain reasonable. Positives to continue (1) COD of another 1160MW, (2) FY12/13 grossing & (3) acquiring distressed plants in medium term. Maintain Buy.

Source : Equity Bulls

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