We close our ACT call on NTPC. The stock has outperformed the BSE power index by 11% since February 21. It has outperformed its IPP peers, Adani Power by 29%, Jaiprakash Power by 43% and Tata Power by 12%. However, it has underperformed the Sensex by 6% due to a sectoral overhang.
However, our long-term thesis remains intact. We expect the company to perform on two key parameters — capacity addition and plant availability. We expect NTPC to add c.9.4-GW capacity over FY13-15e. Also, we expect the plant availability of coal-based plants to improve from FY13 levels (87.6%). The PAF should improve as domestic coal supply from CIL improves with the recent signing of the FSA.