MUMBAI: NTPC today reported a worse-than-expected net profit decline of 2% at Rs 2,152 crore for the second quarter ended September 30, 2009 when compared with Rs 2,193 crore in Q1FY10.

The estimate was for the company to report a net profit increase of 7% at Rs 2,340 crore.

Net sales declined 10% to Rs 10,783 crore when compared with Rs 12,002 crore reported in Q1FY10.

Updated at 1200 hrs: NTPC is likely to report a 6.7% rise in net profit at Rs 2,340 crore for the quarter ended September 30, 2009 when compared with Rs 2,193 crore iin Q1FY09, according to Bloomberg UTV estimates.

Preview: Q2FY10: All comparable (QoQ)

Net Sales seen up 2.8% at Rs 12,340 cr vs Rs 12,002 cr

Net Profit seen up 6.7% at Rs 2,340 cr vs Rs 2,193 cr

EBITDA seen up 2.2% at Rs 3,246 cr vs Rs 3,175 cr

EBITDA Margins seen at 26.3% vs 26.5%

Preview: Q2FY10: All comparable (YoY)

Net Sales expected up 28% at Rs 12,340 cr vs Rs 9,661 cr

Net Profit expected up 11% at Rs 2,340 cr vs Rs 2,110 cr

EBITDA expected up 27% at Rs 3,246 cr vs Rs 2,548 cr

EBITDA Margins at 26.3% vs 26.4%

Factors to Watch

CEA expects capacity addition of 1.2GW against the company's target of 3.3GW for FY10

Main factor would be Sipat project with a capacity of 1.3 GW and 500 MW Korba power plant

Until Aug 09 company had commissioned only 500 MW Kahalagaon unit

Increase in generation to drive growth on a YoY basis

Expect better margins due to higher tariffs and lower costs

Updates on capacity additions going forward

Recent Developments

Govt clears way for 5% stake sale in NTPC

Divestment move to add Rs 8000 - 9000 cr to govt

Stake sale to be via an FPO

Government owns 89.5% in the company

Q2 Developments

RIL - NTPC

Fresh developments in the row over the supply of KG-basin gas

Battle on Gas for the Kawas and Gandhar expansion projects

Filed a case in the SC against RIL for not supplying 12mmscmd at a price of US $2.34/mmbtu

Finally signed an agreement with RIL to buy 2.67 mmscmd of natural gas at the officially approved price of $4.20/mmbtu

MoU with Chhattisgarh Govt

MoU with the Govt of Chhattisgarh to establish a 4GW coal-based thermal power project

Project comprising five 800MW units at Lara in Raigarh district

Talaipalli coal block in Chattisgarh with mineable reserves of 600 MnT

Mining plan for the block has not yet been approved

Power Trade

Granted in-principal approval to set up and operate a power exchange

JV between NTPC, NHPC, PFC and TCS

Power exchange to be named NPEX

Sector Check - Power

Power Deficit continued in Q2 on account of delayed monsoons

Sluggishness in capacity addition added to power deficit

CERC proposed a short term cap on traded power tariffs at Rs8/unit

Higher PLF's on account of the improvement in the fuel availability

KG basin gas is expected to result in assured fuel supply for gas based power plants

Higher tariffs and improved PLF in gas-based plants

Decline in cost of fuel to boost operating margins