Country’s largest power producer, NTPC, on Monday reported a 22% growth in its net profit for the third quarter period of the current fiscal on the back of lower expenditure on heads like employee and fuel costs.
During the October-December quarter, the company posted a net profit of R2,596 crore, compared with Rs 2,130 crore reported by it for the same period in the previous year, according to the company’s unaudited results. The company’s total income grew 1.76% to R16, 529 crore.
“NTPC’s profit after tax was higher than estimated,” said Motilal Oswal Securities, a brokerage, while commenting on the company’s quarterly results.
Although NTPC beat market expectations, its share price closed R2.40 lower at the BSE. Analysts attributed this to widespread market expectations of discounted stock pricing for NTPC’s follow-on offer that is expected sometime next month.
“The market expectation is that NTPC’s FPO might be priced at a discount to the market price along the lines of stock sales by the government in NMDC and Hindustan Copper,” said Amit Patil, research analyst, power, Angel Broking.
The company’s total expenditure fell 11% from the previous year due to reduction in employee, fuel costs. The company had staggered payment of salary hike arrears to employees following the recommendation of Sixth Pay Commission that tapered off in the quarter-ended December.
The company’s fuel bill was lower in the latest quarter as NTPC ordered direct import of coal instead of going through a third party. A depressed international coal market also helped the company cut its coal import costs. The topline growth was, however, a bit subdued, with NTPC reporting just 3% growth in electricity sales in the quarter.
NTPC’s net profit in the three quarters of the current fiscal worked out to 24.24%. The power generator has added as much as 3,820 MW capacity in this fiscal, which accounts for 24% of total capacity addition in the country during this period. The company’s installed capacity stands at 39,674 MW.
NTPC’s total income for the three quarters of the current fiscal added to R50,542 crore, 5.74% higher over the same period of the previous year. Its net profit shot up 24% to R8,237 crore during the same period.