Mehabe score: 4 G Factor: 3 Piotski Score: 6 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 3 and Piotski score of 6.
Description
NTPC is primarily involved in the generation and sale of bulk power to State Power Utilities. Other business includes providing consultancy, project management & supervision, energy trading, oil & gas exploration and coal mining.(Source : 201903 Annual Report Page No: 169)Site:NTPC
Market Cap:
Rs 110,106 cr
Price:
114.0
Trading pe:
8.77x
Book-value:
126/share
Div yield:
2.77 %
Earning yield:
10.23%
Face-value:
10.0/share
52week high:
121.00
52week low:
78.10
Technical Analysis
Stock trades at 114.0, above its 50dma 110.74. It also trades above its 200dma 103.18. The stock remains bullish on techicals
The 52 week high is at 121.00 and the 52week low is at 78.10
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 0.90 times its book value
– has been maintaining a healthy dividend payout of 36.90%
Weakness
– The company has delivered a poor sales growth of 6.48% over past five years.
– has a low return on equity of 11.06% for last 3 years.
– might be capitalizing the interest cost
-Debtor days have increased from 49.81 to 67.92 days.
-Promoter holding has decreased over last 3 years: -11.17%
Competition
– The industry trades at a mean P/E of 23.2x. Adani Green trades at the industry’s max P/E of 795.08x. NTPC trades at a P/E of 8.77x
– Industry’s mean G-Factor is 3.4 while the mean Piotski score is 9.0. NTPC has a G-Factor of 3 and Piotski scoreof 6.
– Average 1 month return for industry is 2.0%. The max 1- month return was given by Tata Power Co.: a return of 17.97 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 30103.0 cr compared to Rs 30391.0 cr for period ended Mar 2020, a fall of 0.9%
Operating Profits reported at Rs 7444.0 cr for period ended Mar 2021 vis-vis 8516.0 for period ended Mar 2020 .
Operating Margins contracted -329.3 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 4.68 compared to Rs 3.88 for previous quarter ended Dec 2020 and Rs 1.55 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 111531.0 cr for period ended Mar 2021 vis-vis sales of Rs 109464.0 cr for the period ended Mar 2020, a growth of 1.9%. The 3 year sales cagr stood at 8.2%.
Operating margins expanded to 30.0% for period ended Mar 2021 vis-vis 29.0% for period ended Mar 2020, expansion of 100.0 bps.
Net Profit reported at Rs 14635.0 cr for period ended Mar 2021 vis-vis sales of Rs 11600.0 cr for the period ended Mar 2020, rising 20.7%.
Company recorded a healthy Net Profit CAGR of 11.5% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 9.0% compared to 11.0% over the last 3 Years. – The stock has given a return of 22% on a 1 Year basis vis-vis a return of -5% over the last 3 Years. – The compounded sales growth on a TTM bassis is 9% vis-vis a compounded sales growth of 10% over the last 3 Years. – The compounded profit growth on a TTM basis is -17% vis-vis a compounded profit growth of -2% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 11.94% vis-vis 12.32% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 2.89% vis-vis 2.99% for Dec 2020
Conclusion
– Stock is trading at 0.90 times its book value
– has been maintaining a healthy dividend payout of 36.90% – The company has delivered a poor sales growth of 6.48% over past five years.
– has a low return on equity of 11.06% for last 3 years.
– might be capitalizing the interest cost
-Debtor days have increased from 49.81 to 67.92 days.
-Promoter holding has decreased over last 3 years: -11.17%
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 110.74 and is trading at 114.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
