Ntpc Ltd

1

ST.XAVIER'S COLLEGE

II.

III.

V.

VI.

1. OBJECTIVE The main objective of this project is to help one to get an overall picture of the contribution of the NTPC Limited to the power sector industries and also to the economy by analysing its operational and financial performance. Studying the past and present contribution of the company so that to focus on the future growth and expansion. 2. SCOPE The scope of this project extends to learning about latest developments in the NTPC Limited with the past of the company and its future plans and to do an analysis on the basis of data collected. The Power sector industry in India comprises of a companies from both the public sectors and also the Government Companies , however the project is limited to study of NTPC Limited and a few of its competitor ST.XAVIER'S COLLEGE

2

Serial no. 1

Topic Name

Slide No.

About NTPC Ltd.

4

2

Power Generation.

5

3

Industry Overview.

6

4

7

5

Demand-Supply & Consumption of Power. Financial Performance Analysis.

6

Financial Condition Analysis.

9

7

NTPC VS It’s Competitors.

10

8

NTPC – Way Forward.

11

9

Findings & Conclusion.

12

10

Suggestion.

13

ST.XAVIER'S COLLEGE

8

3

II. III. IV.

1. Ownership NTPC, India's largest power company, was set up in 1975 to accelerate power development in India. Governments own 89.5%. FIIs own 4.13% and rest 6.37% owned by domestic institution and public.  

2. Size VII. One of the three largest Indian companies with a market capitalisation of more than Rs 1621 billion + VIII. Has net worth of Rs 526.4 billion+ IX. Owns total assets of Rs 893.9 billion+ 3. Stature Ranked # 1 independent power producer in Asian 2007 (by Platts, a division of McGraw-Hill companies). The 5th largest generating company in Asia & largest in India. 411th largest company in the world. (Forbes ranking-2007). NTPC has made an impressive contribution of Rs.57,009.7 million to the Central Exchequer in 2007-08. ST.XAVIER'S COLLEGE

4

I.

II.

III. IV.

V.

VI.

NTPC generates power from Coal and Gas. With an installed capacity of 29,894 MW, NTPC is the largest power generating major in the country. It has also diversified into hydro power, coal mining, power equipment manufacturing, oil & gas exploration, power trading & distribution. With an increasing presence in the power value chain, NTPC is well on its way to becoming an “Integrated Power Major.” NTPC owned 15 coal based power plant with capacity of 23895(MW) & 7 gas based power plant with capacity of 3955(MW), and under joint venture there are 4 coal & gas based power plant with capacity of 2044(MW). Hydro Based Power Projects are Under Implementation in Himachal Pradesh & Uttarakhand with capacity of 1920(MW). During the year, the power stations of NTPC generated 200.863 billion units of electricity the company has registered an increase of 6.5% over the previous year’s generation of 188.674billion units. The availability factor for coal based power stations has increased from 85.03% in 1997-98 to 90.09% in 2006-07 & 92.12% in 2007-08. The PLF has increased from 75.2% in 1997-98 to 89.4 in 2006-07 & 92.24% in 2007-08 which is the highest since the inception of NTPC. The generation/employee of electricity has increased from 4.14(MU) in 1997-98 to 8.48(MU) in 2007-08. ST.XAVIER'S COLLEGE

5

I.

II. III.

IV.

V.

VI.

The GOI has drawn a capacity addition target of 78.577 GW during XI Plan(2007-12), average addition of 16 GW per annum (approx). The PLF for the country was 78.61%, higher by 1.81% points over last year indicating improved efficiency. The total installed capacity in the country as on March 31, 2008 was 143.061 GW with State Sector leading with a share of 52% followed by Central Sector representing 34% share and balance 14% is contributed by Private Sector entities. The total thermal capacity, including gas stations and diesel generation, accounts for about 64% of installed capacity of the country followed by hydro at 25%. Nuclear stations account for 3% and the balance 8% is towards Renewable Energy Sources. The total power generation in the country during the year 200708 was 704.45(BUs) as compared to 662.52(BUs) in 2006-07 registering a growth of 6.33%. State sector share 48%, Central Sector 42%, private sector 9%, & others 1%. With approximately 1/5th of capacity(27.350 GW), NTPC contributes to over 28% (200.863 BUs) of nation's generation. 6 ST.XAVIER'S COLLEGE



The sector is characterised by acute shortages details are:F. Y.

Demand (MU) 631,554

Supply(M U) 578,819

Surplus/Deficit(M (+/-) U) 2006 -52,735 -8.4 2007 690,587 624,495 -66,092 -9.6 % 2008 737,052 664,660 -72,392 -9.8 % %  The per capita electricity consumption has improved to 704 Kwh in the year 2007-08. But it is very low compared to the other countries:Country PCEC in Kwh Country PCEC in Kwh USA 14240 Brazil 2340 Australia 11849 Mexico 2130 South Korea 7710 China 1684 U.K. 6756 Egypt 1465 Russia 6425 India 618 Malaysia 3196 World 2701 Average 7 The comparison is of 2004ST.XAVIER'S data . COLLEGE

I.

II.

III.

IV. V. VI.

The gross income of the Company for the fiscal 2008 was Rs. 400,113 million as against Rs. 353,766 million in the previous year registering an increase of 13%. The expenditure incurred on fuel, employees, generation, administration and other expenses for the fiscal 2008 was Rs. 255,446 million which is 13.34% more than the expenditure of Rs. 225,380 million incurred during the previous year. In terms of expenses per unit of power produced, it was Rs. 1.28 per unit in fiscal 2008 in comparison to Rs. 1.20 per unit in the previous year. Net profit after tax increased to Rs. 74,148 million from Rs. 68,647 million registering a growth of 8% over last year. The total dividend for the year 2007-08 is Rs 3.50 per share as against Rs. 3.20 per share paid last year. Earning per share has increased to Rs. 8.99 from Rs. 8.33 registering a growth of 8% over last year.

ST.XAVIER'S COLLEGE

8

I.

II. III.

IV.

The net worth of the Company at the end of fiscal 2008 increased to Rs. 526,386 million from Rs. 485,968 million in the previous year registering an increase of 8.3% mainly due to retained earnings. The book value per share also increased from Rs.58.94 to Rs.63.84. The debt to equity ratio at the end of fiscal 2008 of the Company went up to 0.52 from 0.50 at the end of the previous fiscal. The net cash from operating activities for the year ended March 31, 2008 increased by 26% from the previous year. The net cash from operating activities was Rs. 101,711 million as against Rs. 80,653 million for the previous year.

ST.XAVIER'S COLLEGE

9



NTPC Ltd. Being the largest power generating company in the country with market share of 20% in terms of installed capacity and about 30% in terms of national generation, The Company is a dominant player in the field of generation.

Particular Net worth (MN Rs) Book Value of share (Rs) Reported Net Profit (MN Rs) EPS(Rs)

NTPC

Neyvelli

00

90,402.8 lignite 0

Power Tata 526,386. Grid 137,541.7 power 0

63.84 32.68 74,148.0 0 14,484.70 8.99

3.44 ST.XAVIER'S COLLEGE

80,528.30 362.11 8,699.00

53.88 11,015.7 0

39.42

6.57 10

Present

2011-12

2016-17

29,894

~ 50,000

~ 75,000

Coal mining (production) --

12 MTPA

~ 47 MTPA

Trading(units traded)

3.3 BU

10 BU

25 BU

Distribution(capacity)

--

1,000 MW

2,000 MW

Employee strength

24547

~ 30000

~35000

Installed capacity (MW)

COAL POWER 23959 MW at present to 40000 MW by 2012 & 53000 MW by 2017. XI. GAS POWER 5435 MW at present to 8000 MW by 2012 & 10000 MW by 2017. XII. HYDEL POWER 2000 MW by 2012 & 9000 MW bY 2017. XIII. NUCLEAR POWER 2000 MW BY 2017. XIV. RENEWABLES 1000 MW BY 2017. X.

ST.XAVIER'S COLLEGE

11

Contribution of the NTPC Limited to the country and to the power sector industry is immense, it accounts for the 28.5% of the total power generated in the country. Per capita consumption of the electricity is also very low in India at 704 Kwh as compare to world average of 2701 Kwh. Government companies accounts for 90% of the generation as compared to the 10% share of private sector. The companies engaged in the generation of power are now trying their best effort to diversify in the other source of energy like hydel power, wind power generation, and power generation from the Renewable sources of energy. The company is also very much focused on the generation of green power with the sustainable development policies. The importance and need of power cannot be ignored as it directly contributed to the growth of the country and GDP growth. The importance of environmental protection is also emphasized by the company engaged in production of power by adopting various environmental protection policies. ST.XAVIER'S COLLEGE

12

I. II.

III.

IV.

V.

VI. VII.

NTPC must target to reduce transmission losses to 15 % for improving the financial health of the sector. NTPC must try to achieve Capacity Addition Targets of becoming 50 GW Company by 2012 and 75 GW by 2017 and maintaining leadership. The company must integrate along the value-chain through entry into coal mining, power equipment manufacturing, power trading, power distribution and lateral diversification into hydro, renewable and nuclear. The Company must impart special thrust on hydro power . Hydro plants are free of emissions, are excellent for meeting peak demand and have sound long-term economics. The Company must try to entry into coal mining business as a part of its fuel security strategies. long term measure must be taken by company to secure fuel certainty. The company must give thrust on New Renewables source of energy as a Part of Sustainable Energy Development Strategy. The company must try to give more emphasis on the Human Resource Development & Compensation Package so as to make their employees 13 ST.XAVIER'S COLLEGE