NTPC Preview: 24% rise in Q1 net likely, brokerages positive on growth prospects

India’s largest power generation company, NTPC, is expected to report good growth in net profit for the quarter ended June 2023 compared to a year ago.
Autonomous profit after tax is expected to grow 24% year-on-year to Rs 4,543.23 crore in the first quarter of fiscal 2024, while revenue is expected to grow 5% year-on-year to Rs 40,404.53 crore, based on the average of three brokerage estimates.
Though on a QoQ basis, net profit is expected to drop 20% while revenue could drop 2%.
Kotak Institutional Equities saw a consecutive decline in NTPC net profit due to inclusion of previous period sales of Rs 1,040 crore, recorded in Q4 FY 2023.
Sharekhan expects healthy earnings growth for PSU and sees NTPC’s net profit growing 44% year-over-year. According to the broker, NTPC earnings will be supported by factors such as continued and strong growth in its regulated equity base, higher other income and lower interest expenses. India’s electricity consumption increased slightly in April and May 2023, remaining stable year-on-year. Temperatures are expected to be moderate in June due to monsoons.
Electricity demand was weak in the June quarter, with electricity production across India (excluding renewables) unchanged at 377 billion units from a year earlier.
This weak demand will likely lead to moderate electricity production in the first quarter of fiscal 2024. However, power producers are enjoying some relief as international coal prices have corrected sharply, providing some respite.