NTPC gains 4% after Q1 earnings; consolidated net profit declines 6% YoY

Shares of NTPC rallied over 4 per cent on the BSE on Monday after the company reported a 5.87 per cent year-on-year (YoY) decline in its consolidated net profit at Rs 2,948.94 crore for the first quarter of the fiscal year 2020-21 (Q1FY21).

The company's revenue from operations slipped 2.57 per cent YoY to Rs 26,194.76 crore during the quarter under review.

At 10:45 AM, shares of the company were trading 3.62 per cent higher at Rs 91.60 on the BSE. The stock hit a high of Rs 92.15 during the day against previous close of Rs 88.40. In comparison, the S&P BSE Sensex was trading 0.26 per cent higher at 37,974 levels.

Profit before exceptional item and tax rose 16.10 per cent to Rs 4,280 crore. Total tax expense rose 24 per cent to Rs 1,386.58 crore in Q1 June 2020 over Q1 June 2019.

NTPC reported an exceptional cost of Rs 836.76 crore in Q1 June 2020. The PSU enterprise said that in accordance with the announcement of Government, to allow a rebate of 20 per cent-25 per cent on the capacity charges, the company has approved Rs 1,510.47 crore for 2020-21.

In its June 29 report on NTPC, ICICI Securities had said that though thermal capacity addition is expected to see a significant decline post FY23-24, the addition of renewable capacity is expected to gain momentum in the same period.

"We would still like to see the execution roadmap of the company in the renewable space. Valuations are 0.7x P/BV on FY22E. We would wait to turn buyers when some aggression is visible in renewable capacity addition," the brokerage had said. It had "HOLD" rating on the stock with the target price of Rs 105.

NTPC Limited