Technology

NTPC India (NTPC) is the largest power utility in the Indian Power sector, having 24% & 16% market share in the power generation & installed capacity in India respectively. Private sector is in bad shape on back of poor business economics on back of slew of factors; mentioned in the report. On the other hand, NTPC India, which is a competitive player in the industry, supplies all its power under the long term PPA (Power Purchase Agreement); is insulated to Industry dynamics. Over the next 4 years, company’s CWIP will be capitalized. Thus, CWIP ratio to Net Fixed Assets will come down; due to commercialization of 4-5GW capacity/year; enhancing the regulated ROE of the company and improving growth. Thus, given the pain in the sector NTPC on back of its positioning and valuations at 1.1xPBV FY2019E valuations, offers good entry for long-term investors. We recommend a Buy.

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