POSTED BY April 1, 2012 7:36 pm COMMENTS (9)ON
finally folks! I m posting why i want to invest in NTCP, as i am a newbie i will participate less in this discussion and love to hear ur opinions
1. good dividend paying history
2. revenue – avg growth rate 10+ %
3. net cash flow has increasing pattern
4.gross margins – approx 20% +
5. operating margins – sustainable about 30 %
6. India has always been a power-deficient country and considering the ever increasing demand for power in India, huge capacity additions are required in this sector. NTPC has set a target to become a 1,28,000 MW company by year 2032. Keeping this target in mind, the Company has embarked on plans to have 75,000 MW of generation capacity by 2017. As of now, 14,088 MW of generation capacity is under construction via different projects which are under various stages of completion.
7.NTPC primarily sells power to State Electricity Boards (SEBs) whose financial health has been bad over the years. Hence there is a risk for NTPC of its bills not getting realized. However, NTPC has been able to realize 100% of its billing to customers continuously for the past 8 years thus indicating that it has efficient collection mechanisms in place. This has been possible as NTPC has entered in to a tripartite agreement with state distribution companies and RBI until 2016 which helps NTPC in full realization of its billing.
8.Coal is an important raw material for NTPC as currently 80% of its power generation capacity is coal based and in future also, a considerable portion of generation capacity is going to be coal-based. NTPC has entered in to a Long Term Supply Agreement with Coal India Limited for supply of coal for a period of 20 years. Hence, NTPC’s projects carry negligible fuel supply risks.