Fundamental & Technical Report NTPC By CapitalHeight

Fundamental and technical report NTPC

Introduction

NTPC is the public sector unit of India. It is India’s largest energy conglomerate with roots planted way back in 1975 to accelerate power development in India. Since then it has established itself as the dominant power major with presence in the entire value chain of the power generation business. From fossil fuels it has started generating electricity via hydro, nuclear and renewable energy sources. It will play a major role in lowering its carbon footprint by reducing greenhouse gas emissions. To strengthen its core business, the corporation has diversified into the fields of consultancy, power trading, training of power professionals, rural electrification, ash utilization and coal mining as well. NTPC became a Maharatna company in May 2010, one of the only four companies to be awarded by the government. NTPC was ranked 400th in the ‘2016, Forbes Global 2000’ ranking of the World’s biggest companies.

NHPC Power Generation

  • Coal Based Power Stations
  • Gas Based Power Stations
  • Hydro Based Power Projects

Present installed capacity of NTPC is 48,028 MW (including 6,966 MW through JVs/Subsidiaries) comprising of 45 NTPC Stations (19 Coal based stations, 7 combined cycle gas/liquid fuel based stations, 1 Hydro based station), 9 Joint Venture stations (8 coal based and one gas based) and 9 renewable energy projects.

NTPC

Other Services by NTPC

NTPC undertakes consultancy and turnkey project contracts for domestic and International clients in different phases of the power plants. NTPC has emerged as the acknowledged leader in engineering, construction, O&M, RLA/R&M and management of power projects hence is preferred for consultancy assignments.  It is accredited with ISO 9001:2008 certification and was established in 1989.NTPC offer consultancy services related to infrastructure sector business such as:

  • Fossil fuel based thermal power plants
  • Combined cycle power plants
  • Cogeneration plants
  • Water supply and treatment
  • Environment engineering and management

Skill Development at NTPC

NTPC runs a state-of-the-art Power Management Institute (PMI), at NOIDA. PMI has over the years trained a large number of professionals from NTPC, State Electricity Boards and other power utilities in the country. Also, PMI delivers programme to Power Sector companies in the Gulf Counties at their locations and participants also come from South Asia, Gulf and African countries to PMI.With a wide range of expertise and experience acquired over the years, PMI offers programs in the following categories:

  • Enhancing General Management Competence and Skills
  • Enhancing Technical Expertise
  • Upgrading Functional Skills
  • Managing Information Technology
  • Induction Level Training Programs

Fundaments of the Company

Balance Sheet

NTPC Balance Sheet

Income Statement

NTPC Incom Statement

Key Financial Ratios

NTPC Key Financial Ratios

Fundamental Analysis

 NTPC Debt Equity ratio is equal to one above which company’s profit efficiency will be affected so this is an average value. Company’s book value is 107 and its current market price is 171 and the ratio of market cap to shareholder equity is 1.59 approx. Stock is trading at premium investor has to pay 1.59 rupee for every rupee invested. This is below the average value of all the blue chip stocks traded at NSE.

From last three years company’s sales is almost constant. Operating profit of the company is moving around 17000 crore from last 4 years and its net profit is also constant at 10000 crore from last 3 years. Average earning of the company is 7% at current market price.

NTPC is one of the biggest power sector company of India. In coming years efficient energy would be the goal of government and it would be a necessity of general public. India is energy deficit country and to provide energy to India to its full capacity more plants and efficiency will be needed in coming future. NTPC plays a major role in India’s energy sector. As demand of energy will increase NTPC has to build new plants which will increase the sales of NTPC. Increase sales will lead to more profit and company’s net profit margin is15% which is an attractive figure.Company would have the good chance for growth.

Most of the company at NSE are trading at high premium and there PE is also very high because of which investing in those companies is little bit expensive for the investor whereas NTPC is trading at very low premium and at current market price its PE is also not very high. For a conservative investor NTPC is a buy candidate. Return on NTPC could be very attractive if investor hold the stock for minimum five year less than it would not be able to gain an attractive return because company’s growth potential would be effective on long term basis.

Technical Analysis of NTPC

Daily Candlestick Chart

Daily Candlestick Chart

NTPC broke the long term resistance line and closed above it. It is also holding above the trend line which is a sign of strength and in coming day market can move into new highs. Volume activity in NTPC is also increasing. NTPC was in downtrend from last 6 years and now it is in the initial stage of an uptrend. NTPC looks a very strong candidate for long term buying on daily technical chart. The major support is 167 and on upside the major resistance is 194. Above 167 NTPC is buying candidate with the stop loss of 157 and the target would be 194 and 215

Weekly Line Chart

Weekly Line Chart

To reverse 6 years bear trend of NTPC a long term patter was required on the chart and NTPC has made the one of the most trusted pattern which is a double bottom. The support of the double bottom was 113 and the resistance was 167. The gap between the two bottoms is almost equal to one and half year and the difference between the peak and trough is more than 25 % because of which this pattern falls in the category of long term reversal. High volume on the break out shows the significance of the pattern. The target of the pattern is equal to 215. Its strong buy on Weekly technical charts.

Disclaimer

 

Live Stock Market Updates – Nifty trades below 7,950 mark

bear-marketThe Sensex slipped below the 26,000 level by falling over 300 points in mid-session trade Monday, pulled down mainly by financial stocks.

The Sensex pared gains after rallying as much as 120 points in morning trade on Monday, led by losses for HDFC, Infosys, TCS and Maruti Suzuki. The domestic market fluctuated between gains and losses as energy producers advanced, while automakers and lenders declined.

The Nifty50 reclaimed the 8,100 mark but immediately turned volatile ahead of expiry of November futures & options contracts due on Thursday.

At 12:46 PM, the S&P BSE Sensex is trading at 25,836, down 314 points, while NSE Nifty is trading at 7,960, down 114 points. It is the first time Nifty dropped below 8,000 since June 2016.

The BSE Mid-cap Index is trading down 2.23% at 11,803, whereas BSE Small-cap Index is trading down 2.69% at 11,550.

Holding ground in the gloomy market were WIPRO, INFY, ONGC while POWERGRID, SBI, HDFC bore the brunt through the first hour of trading.

Only IT index is trading in green, while realty, banking, auto, metal, financial and FMCG were in red.

The INDIA VIX is up 6.13% at 18.8975. Out of 1,885 stocks traded on the NSE, 1,384 declined, 226 advanced and 275 remained unchanged today.

A total of three stocks registered a fresh 52-week high in trade today, while 53 stocks touched a new 52-week low on the NSE.

Rashtriya Chemicals & Fertilizers Ltd fell 3% after the company reported a marginal fall in net profit at Rs 43 crore for the quarter ended September 30. Its net profit stood at Rs 45.6 crore in the year-ago period.

Panacea Biotec rallied 2% after the pharma company announce receipt of Establishment Inspection Report (EIR) from the USFDA indicating the formal closure of the cGMP and Pre­ Approval Inspection conducted by USFDA, at its Oncology Parenteral and Oral Solids Dosage formulation facilities at Malpur, Baddi in Himachal Pradesh.

Cadila Healthcare slipped 1.5%. Zydus Cadila has received the final approval from the USFDA to market for Metronidazole Tablets USP in strengths of 250 mg and 500 mg. The drug which is used to treat infections caused by bacetria will be produced at the group’s formulations manufacturing facility at Baddi.

Mawana Sugars soared 12.6% to Rs 48 on the BSE. The Board of Directors of the Company has agreed to sell one of the operating units of the Company viz. Titawi Sugar Complex (TSC) in Uttar Pradesh as a going concern on an ‘As is Where is What is’ basis to Indian Potash Limited.

Techno Electric & Engineering Company gained 2% after the company has received an approval for sale/disposal of 45 MW Wind Power assets of the company, subject to approval of shareholders and other relevant authorities. The board of director at its meeting held on November 19, 2016 has approved for the same.

HPL Electric & Power hits 10% lower circuit at Rs 91. The company announced that the Company has reduced its debt around Rs 320 crore from IPO proceeds.

Punjab National Bank fell 6.6%. The bank has cut interest rate on fixed deposits by up to 0.25% in line with competition.

India Cements tanked 3%. The company reported a 62% jump in standalone net profit at Rs 62 crore for the quarter ended September 30, 2016. It had posted a net profit of Rs 38.5 crore in the year-ago period.

HDFC and Unitech are trading lower on the BSE. With Unitech defaulting on loan repayment, housing finance major HDFC said it has sold the realty firm’s outstanding loan of Rs 869 crore to JM Financial Asset Reconstruction Company (JMFARC).

NHPC dipped 2%. The Company has posted a net profit of Rs 1,554.7 crore for the quarter ended September 30, 2016 where as the same was at Rs 1215.7 crore for the quarter ended September 30, 2015.

NBCC slumped 3.5%. NBCC reported a consolidated net profit of Rs 69 crore against net profit of Rs 68 crore in the corresponding quarter last year.

Bharat Forge tanked 3.5%. The company announced the acquisition of US-based Walker Forge Tennessee, for a total consideration of USD14mn. Bharat Forge has made this acquisition through its US subsidiary.

Infosys advanced 0.5%. The IT company has invested Rs 145 mn in a start-up UNSILO. The investment is done through Infosys innovation fund.

Alembic Pharmaceutical is trading marginally higher on the BSE. The company has received approval from the US Food & Drug Administration (USFDA) for its Abbreviated New Drug Application (ANDA) for Telmisartan and Amlodipine Tablets.

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Coal India April-October output at 274 MT

Coal IndiaCoal India Ltd produced 274 million tonnes (MT) of coal in the first seven months of the ongoing fiscal, lower than the target of 307 MT, even as the demand for fossil fuel started picking up.

The company registered a marginal decline in its production in October to 43.51 million tonnes (mt) compared to 44.37 mt produced in the same month last year. According to provisional data, its off-take for the last month stood at 43.04 mt, down marginally from 44.41 mt from in the year-ago month.

The offtake of fossil fuel by the coal PSU in April-October period was 292.16 MT, lower than the target of 331.76 MT.

Coal India Ltd
BSE 324.55 [5.30] ([1.61]%)
NSE 324.35 [5.70] ([1.73]%)

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Live Stock Market Updates – Nifty trades below 8650

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The domestic market are trading flat as global investors remained cautious as the acrimonious US presidential election campaign entered its final week. The Bank of Japan on Tuesday held off on expanding stimulus and maintained short-term interest rate target. Market is also watching global cues, with the U.S. Federal Reserve’s meeting set to begin on Tuesday, which could provide clues on a December rate hike.

The Indian equity market opened higher on Tuesday after Chinese manufacturing gauges climbed to two-year highs and Bank of Japan kept monetary rates unchanged.

At 1:36 PM, the S&P BSE Sensex is trading at 28,009 up 78 points, while NSE Nifty is trading at 8,662 up 36 points.

The Nikkei Markit India Manufacturing Purchasing Managers’ Index (PMI) a gauge of manufacturing performance jump to 54.4 in October from 52.1 in September, indicative of a robust improvement in manufacturing business conditions in the country. Manufacturing sector growth in India hit a 22-month high in October, driven by a sharp and accelerated increase in new orders, purchasing activity and output.

The BSE Mid-cap Index is trading up 0.37% at 13,523 whereas BSE Small-cap Index is trading up 0.21% at 13,612.

HDFC, Hero MotoCorp, Tata Steel, Lupin and Adani Ports are among the gainers, whereas ONGC, Axis Bank, Infosys, M&M, Coal India and Sun Pharmaceuticals are losing sheen on BSE.

Some buying activity is seen in metal, telecom, power, utilities and basic materials sectors, while consumer durables, banking,power, IT, teck and FMCG are showing weakness on BSE.

The INDIA VIX is up 0.85% at 15.6225. Out of 1,888 stocks traded on the NSE, 760 declined, 832 advanced and 296 remained unchanged today.

A total of 115 stocks registered a fresh 52-week high in trade today, while 10 stocks touched a new 52-week low on the NSE.

Ashok Leyland Ltd is currently trading at Rs 91.55, up by Rs 0.2 or 0.22% from its previous closing of Rs 91.35 on the BSE. The company posted its total sales in October at 12,533 vehicles versus 9,803 vehicles last year. The company said October M&HCV sales were at 9,574 vehicles versus 7,176 vehicles last year. Its LCV sales stood at 2,959 vehicles compared to 2,627 vehicles last year.

PC Jeweller Ltd is currently trading at Rs 497.5, down by Rs 13.55 or 2.65% from its previous closing of Rs 511.05 on the BSE.

Nihar Info Global Ltd advanced 1.6%. The company has received the Purchase Orders from My Home Constructions, Rain Industries and Pamidi RSB Build Tech in the last ten days.

Eicher Motors jumped 3% after the company reported a 33% increase in total sales in October 2016 at 59,127 units as against 44,522 units in the same month last year. During October 2016, the number of motorcycle units exported, increased by 95% to 748 units from 384 units in October 2015.

Strides Shasun Limited gained 1% after the company announced that it has received approval from the United States Food & Drug Administration (USFDA) for Abacavir Tablets USP, 300 mg.

Maruti Suzuki dropped 0.32% to Rs 5,880 after its sales dipped in the month of October. The company sold 1,33,793 units in October compared to 1,34,209 vehicles in October 2015.

BGR Energy Systems soared 5.3% after the company has been awarded the Balance of Plant (BoP) Contract from TANGEDCO for 1×800 MW North Chennai Thermal Power Project – Stage III. BGR Energy secured this contract in an International  competitive bidding which witnessed stiff competition. The value of the contract is Rs 2,600 crore The contract completion period is 36 months from the date of award.

Allcargo Logistics rose 1% to Rs 191 after the company said its board will meet on 7 November 2016, to consider a proposal for buyback of the equity shares of the company.

Sical Logistics gained 2% to Rs 222.10 after the company securing contract from West Bengal Power Distribution Corporation.

Kitex Garments tanked 10.4% to Rs 458 on BSE after net profit fell 52.4% to Rs 12.92 crore on 20.5% decline in net sales to Rs 95.55 crore in Q2 September 2016 over Q2 September 2015.

Bharti Infratel zoomed 2%. KKR and pension giant Canada Pension Plan Investment Board (CPPIB) are in talks with Bharti Airtel to acquire a significant stake in its listed tower arm Bharti Infratel, as per media reports.

Reliance Industries is trading marginally higher on the BSE. The Directorate General of Hydrocarbons is understood to have computed the penalty payable by Reliance Industries (RIL) for exploiting natural gas that migrated to its KG-D6 block from ONGC’s adjacent asset at upwards of $1 bn, as per media reports.

NBCC inched up 1% after the government will engage state-run construction company NBCC to monetise around 771 acre of prime land held by erstwhile VSNL, a company that the government had sold to the Tata group in 2002 as part of its asset-sale programme.

ONGC slipped 1% to Rs 287.  ONGC Videsh Ltd, the overseas arm of state-owned ONGC, has completed the acquisition of additional 11% interest in Russia’s Vankor oilfield, taking its total stake to 26%.

Karnataka Bank is trading lower by 0.57% on the BSE. The bank informed the BSE that the board of directors at its meeting held on Friday finalised the right issue opening and issue closing dates. The issue opens on November 7, and closes on November 21. Last date for request of split application form is November 15.

Ujaas Energy climbed 13.8%. The company reported a net profit of Rs 9.7 crore for the quarter ended September 30 compared with Rs 3.3 crore reported in the year-ago period.

Heritage Foods slipped 2.4%. The company said it would acquire the dairy business of Reliance Retail through a slump sale. The company has executed a binding agreement for the acquisition. The proposed transaction is subject to regulatory approvals and other conditions and procedures that are customary for similar transactions, Heritage Foods said in a BSE filing.

Avanti Feeds gained 2% after the company reported its consolidated net revenue for Q2 of FY17 was 34% higher YoY at Rs 713 crore. However, reported Ebitda fell by 11% YoY to Rs 56 crore and Ebitda margins shrank 397 bps YoY to 7.9%.

The rupee opened higher by seven paise at 66.72/$ as against the previous close of 66.79/$.

Asian markets opened on a weak note following the US indices which closed marginally in the red after very range bound trade. Uncertainty on the US elections which are due next week coupled with rise in bond yields kept sentiment weak. The only exception continues to be Brazil & Russia where the indices continue to tread higher with more money chasing growth as economies see better times ahead. Mutual Funds pumped in net Rs. 8,106 crore, foreign funds pulled out more than Rs. 10,000 crore in October; a bulk of the withdrawals was in debt.

The dollar has weakened. China’s manufacturing sector saw its fastest pace of expansion in recent years as Purchasing Managers’ Index (PMI) moved higher to 51.2 in October.

Crude oil prices, which were subdued for weeks rose marginally on expectations of some consensus among OPEC members in managing production. The email saga may be haunting Clinton but polls suggest she is still ahead in the race for US President. The Bank of Japan maintained status quo on rates. Fed outcome tomorrow will be eyed though nothing much is expected ahead of US presidential elections.

India’s core sectors grew 5% in September driven by strong growth in the steel and petroleum products sectors. The growth in the Index of Eight Core Industries is stronger than the 3.2% rise in August.

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