NTPC has delivered lower-than-targeted power generation so far in FY09. Management has indicated a shortfall in 1Q09 mainly due to maintenance shutdowns. There has been little improvement in 2Q09, but the company's coal stocks at its thermal power stations have not increased either. Management had indicated that coal stocks would improve once the monsoon season is over. We take account of the coal stock position at all of its power stations and the generation shortfall (vs set targets). We maintain our Buy rating on NTPC with a target price of Rs202.21 but would turn more cautious on any earnings shortfall from continued shortages in coal supplies.
Coal stock and generation
NTPC has been suffering coal-supply shortages from its linkage mines with Coal India. The three ministries dealing with power, coal and railways have been blaming each other for the increased shortages. While the Power Ministry has been asking for increased coal supplies, the Coal Ministry has said that NTPC produces much more than the rated plant load factors (PLF), thereby causing the shortage in coal stock.
.. Despite our expectation that the coal stock position at NTPC’s thermal stations would improve on seasonality, it has not (see Table 1). NTPC management indicated last month that the lower coal-stock position and implied shortage of supply was due to the monsoon and that the situation would improve once the monsoon rains pass.
.. Although NTPC normally maintains a lower-than-required average coal stock position, an increasing concern is that some plants have “zero” days, or less than one day of stock
Coal stock and generation
NTPC has been suffering coal-supply shortages from its linkage mines with Coal India. The three ministries dealing with power, coal and railways have been blaming each other for the increased shortages. While the Power Ministry has been asking for increased coal supplies, the Coal Ministry has said that NTPC produces much more than the rated plant load factors (PLF), thereby causing the shortage in coal stock.
.. Despite our expectation that the coal stock position at NTPC’s thermal stations would improve on seasonality, it has not (see Table 1). NTPC management indicated last month that the lower coal-stock position and implied shortage of supply was due to the monsoon and that the situation would improve once the monsoon rains pass.
.. Although NTPC normally maintains a lower-than-required average coal stock position, an increasing concern is that some plants have “zero” days, or less than one day of stock
No comments:
Post a Comment