Commodity Online
MUMBAI: The National Thermal Power Corporation's (NTPCs) 11th Five Year Plan target of capacity addition seems belligerent as the public sector power major had only 15% (3,240 MW) addition in almost 40% (YTD from FY2008) of time.

The plan targets put by the planning commission for a capacity addition of 78,800 MW over the 11th Five Year Plan, of which approximately 11,000 MW has been added from the start of the project, which is only 14% commissioning from 40% of time.

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According to the Central Electricity Authority data as much as 67,700 MW of projects are still either under construction or at the planning stage. Of the total 78,800 MW of power capacity addition, 36,874 MW of capacity addition was to come from the Central Utilities.

From the total plan, NTPC had laid a target for capacity addition of 22,430 MW over the 11th Five Year Plan (FY2008-FY2012). However, the PSU until now had been going slow in terms of capacity addition, commissioning and commercialization.

The sluggishness was attributed to several key concerns like, coal linkages, balance land acquisitions and site clearances issues, delay from equipment manufacturers, delays from other contractors for the purpose of piling etc. On account of these factors, experts opine that the bulk capacity addition is likely to be postponed by 12-18 months and may be pushed to FY12, while balance might overrun the 12th Five Year Plan.

On account of critical coal levels and lower gas supplies at some of the power plants, the plant load factor's (PLF's) is expected to remain range bound at around 90%. However, faster commissioning of captive coal mines, entry of hydro power in total capacity and gas from KG basin would be a big boost to the capacity expansion of the company, going forward.

Slow progress towards capacity addition in the startup years of the 11th Five Year Plan, there would be a flat growth in revenues at the CAGR of 8% for FY08-FY11E and PAT growth at CAGR of 6% for FY08-FY11E.

However, companies net sales have showed a steady fall from FY07, when it grew at 24.8% to Rs.32631.7 crore. In the FY 2008, sales growth declined to 13.6% and stood at Rs.37091 crore. According to estimates, sales growth would fall further during FY09E to 10.5% at Rs.41000.2 crore.

Company’s net profits too have been on a sliding trend as PAT had risen by 17.9% for FY07 as against FY06, which had fallen to 8% for FY08. For the current fiscal the growth in PAT is estimated to fall further to 5.4%. The stock traded at Rs.177.55 on the Bombay Stock Exchange (BSE) on Friday, marginally down by 0.17% from its previous close.

With inputs from report by Research Division of Prabhudas Lilladher Pvt. Ltd. Mumbai, India

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