NTPC Limited analyst Q&A

Thank you very much. We will now begin the question-and-answer session. We will take the first question from the line of Mohit Kumar from ICICI Securities. Please go ahead.

Congratulations on a superb listing of NTPC Green. My first question is, what was the under- recovery in the coal-based power plant in 9M FY25?

See, as we had shared during our last conference call that we stood at Rs.706 crore under- recovery, but now we have improved during the quarter 3, we have improved it by Rs.238 crore positive. So, at the end of December, we stand at an under-recovery of Rs.468 crore. And going ahead the best performance is always in the fourth quarter. So, accordingly, we hope to improve it further and bring it in the range of Rs.250 crore to Rs.300 crore.

Understood, sir. My second question is on the NTPC Green. I just wanted to reconfirm the number. You said 3.5 gigawatt operational capacity, 14 gigawatt of LOI awarded. Is that right?

Correct.

So, my question is, what is the capacity you expect to commission in Q4 FY25 and FY26 and FY'27, based on the current portfolio?

During 9M FY25, NGEL has added 550 megawatt commercial RE capacity to its portfolio. As on 31st December, the commercial capacity stands at 3,475 megawatt as against 2,761 MW as on 31st December 2023, and we have added an additional 135 megawatt renewable capacity in the fourth quarter to date.

What is the capacity you expect to commission in FY25, FY26, and FY27 on the NTPC Green?

Okay. So, renewable capacity for the current year till date, we have added 685 megawatt. And for entire financial year, we expect to touch around 3,088 megawatt.

For FY26 and FY27, similar number?

That's close to 5 gigawatt and 8 gigawatt tentatively.

Understood. Sir, a request from our side, given that NTPC Green is now listed entity, is it possible to share some press release detailing the portfolio of the renewables? It will be very helpful.

Current portfolio?

No, no. Going forward, I think we request from our side that there should be an update on the RE portfolio by every quarter. That will be very helpful for us.

Okay. Noted.

We'll take our next question from the line of Subhadip Mitra from Nuvama. Subhadip Mitra: Sir, if you could please help us with the adjusted PAT number for this quarter for both stand- alone and consolidated?

Yes. See, as far as standalone is concerned, for Q3, we have Rs.4,618 crore as adjusted PAT as against a reported PAT of Rs.4,711 crore. And as far as nine-month is concerned, as against a reported PAT of Rs.13,871 crore, the adjusted PAT is Rs.13,015 crore, which would be 14% higher compared to the nine months last year. Subhadip Mitra: Okay. And the growth for the 3Q would be how much, Y-o-Y?

6% on a stand-alone basis. Rs. 4,618 compares favorably to 6% above Rs.4,356 crore, which was the last year's figure. Subhadip Mitra: Understood. And the similar numbers for the consolidated?

Similar number for consolidated, Rs.4,964 was the adjusted PAT and as far as the nine-month is concerned, Rs. 14,796 crore compared to Rs.13,437 crore last year, which is 10% above the previous year. Subhadip Mitra: So, the consol PAT for nine months is 10% Y-o-Y growth and for the third quarter, the consolidated adjusted PAT would be a growth of how much?

It would be close to 1%. Subhadip Mitra: Okay. So, the flattish number in 3Q for consolidated, is there any particular reason that's worth highlighting? Was there a higher base of last year because there was something that came in that quarter and there is some lumpiness?

I will urge you to look at the nine-month figure. That should show the overall trend. Subhadip Mitra: Understood. Lastly, two points on my side. The incentive earnings under the new CERC guidelines, I would assume much of that would come in a chunky form in fourth quarter. Would there be any indicative number that you're looking at, given that nine months are already past? And are you looking at larger, chunkier incentive earnings in 4Q?

See, incentive, we have a figure of Rs.762 crore. We expect to maintain the same trend. Subhadip Mitra: In terms of awarding, you did mention that the new thermal awards are expected to be about 7.2 gigawatt by FY27. So, are we expecting this to be more front-ended, that much of this award will be completed over FY25 and FY26? Any timelines on that? On the awarding and the commissioning, both, please.

See, there is presently NIT, we have floated around 2,400 megawatt. And we expect this to be concluded in this quarter. I think we should take it to the logical end for 2,400 megawatt and further 4,800 megawatt is something which would be there in the agenda for FY26 and FY27. Subhadip Mitra: Okay. Just a follow-up. The last one is in terms of the commissioning numbers for the thermal piece for, let's say, FY25, FY26, and FY27? That's the last one from my side.

See, as far as the COD guidance is concerned for FY25, on a standalone basis, we expect 2,178 megawatt coming from two thermal projects and renewable projects. And considering the JV subsidiary, the figure would be 4,798 MW, which comprises of 3,088 MW of renewables. This includes two projects of THDC, one a 660-megawatt thermal project, one hydro pump storage project of 250 MW, and one 800 megawatt of Patratu. So, all this put together, the JV subsidiary tallies at 4,798 MW. For a group level, it would be 6,976 MW, for the current financial year. So, if you want the overall breakup, the thermal total will be 2780 megawatt, hydro will be 250 MW, and renewable will be 3,946 MW. So total of 6,976 MW. Subhadip Mitra: This is FY25. This is by March of FY25, correct?

Yes, absolutely. Subhadip Mitra: Okay, and anything from FY26 next year?

I request you to join back the queue please, as we have other participants waiting. Thank you. Next question is from the line of Gaurav from Axis Mutual Fund. Please go ahead.

Sir, you did mention that we are targeting close to 3,100 megawatt for the year, in NTPC Green, in terms of addition. I just wanted to check the current commissioning pipeline -- the current commissioning momentum, is it in line with your initial targets? And how much more do we have to scale up in terms of resource mobilization in order to achieve both the current year target as well as the subsequent year target?

See, up to Q3, we had achieved a figure of 640 megawatt. And a major portion of that, as things are lined up, it would be in the fourth quarter only. And put together, we are expecting something in the upper side of the 3,000 megawatt for the group as a whole. So, this would include the capacity addition in NTPCREL, NGEL, NTPC and some other inorganic growth also. And for the 5 gigawatt and the 8 gigawatt, which we have mentioned, there is a complete visibility about this capacity addition.

Understood, sir. Just one more follow-up. So, you did mention that we have won a few new projects as well in terms of solar plus battery kind of tenders. What kind of IRRs are we targeting in those?

It would be in the range of 12.5%.

Understood, sir. Thank you.

Thank you. We'll take our next question from the line of Puneet from HSBC. Please go ahead.

No, I think the capacity addition is something, it depends on the nature of the site. It is incidentally lined up in a way that the chunk of the capacity addition is coming in the fourth quarter. It can't be, as per my desire that it should be completely equated. It so happens, in some years, there could be a spillover and you can see a greater capacity addition in the first and second quarter. But largely speaking, as these set of projects which are on hand, they are planned to be commissioned in the fourth quarter.

Understood. And on the thermal side, if you can also give some guidance for FY26 and FY27 for NTPC standalone and the JVs separately, if possible?

Yes. As far as FY25, I had elaborated it with the earlier participant. But for FY26, we expect, I'll begin with the total figure. The total figure we have is of 7,771 megawatt, comprising of 1,460 megawatt of thermal projects, hydro 750 megawatt, and renewable of 5,561 megawatt. And if you dissect that between standalone and JV subsidiary, JV subsidiary would constitute a chunk of that, it is 7,569 megawatt. and standalone it will be 202 megawatt of renewables. No thermal projects is lined up on a standalone incidentally in the next financial year. But in the JV, Patratu 2, THDC Khurja unit 2, and THDC hydro PSP 750 megawatt is lined up. Renewables will constitute 5.35 gigawatt, as I mentioned to you. So that tallies 7,569 MW of JV subsidiary, 202 MW standalone, which takes the figure to 7.77 gigawatt for the FY26.

Understood. Very clear. And FY27?

FY27 is a gross figure of 9,904 gigawatt. That would have an element of thermal 1,460- megawatt, hydro 444 megawatt, renewable 8,000 megawatt. And if you split it between JV subsidiary and standalone, JV subsidiary will be 9,244 megawatt, while standalone is 660. That would be the Talcher Stage 3 Unit 1. In the JV subsidiary side, Patratu Unit 3, 800 megawatt. THDCIL's Vishnugad-Pipalkoti, 444 and renewable, as I mentioned to you already, it would be 8 gigawatt, which takes the total to 9,244 MW of JV subsidiaries. And the overall tally to 9,904 gigawatt. So, on a whole, for the 3 years, FY25, FY26, and FY27, we have a figure of 24,651 megawatt of overall capacity addition in the 3 years, where thermal will constitute 5,700 MW, hydro will be 1,444 MW, and renewable total would be 17,507 MW. I think that makes it amply clear.

Yes, absolutely. Thank you so much. Last one, if I may. You talked about the pipeline of 7.2 gigawatt to be ordered out. All of them are in JVs. Is there a plan to add something at standalone level also beyond this?

That's an exploratory process, see, we don't do this by any design. We have to look at the overall capacity addition, the adequacy, the demand, the transition imperatives. So, our stated policy is that we would not go for green field. So whatever fits into this philosophy, we'll have a priority, the merit order, as per that, rather than any other order. So, if need arise, there are some potentials in the standalone NTPC also, but then we will go as per this, and subject to feasibility, of course. Every project is brought with feasibility.

Sir my question is on the under-construction renewable capacity. As you said, it was around 10 gigawatt. Sir, how much of this capacity would we have land and transmission tied up?

See, as far as evidently, FY25 is there, and FY26, what we have targeted of 5 gigawatt. We have all the resources in place, including land.

Next question is from the line of Ragini Pande from Elara Capital.

Sir, what was your PLF incentives in this quarter and the last year, if you can share?

Okay. See, nine months, we have Rs.762 crore of incentive. We did Rs.255 crore during the Q3, taking the tally to Rs.762 crore.

Next question is, what is the income from the late payment surcharge regulation? I mean, how has the receivables improved after the implementation of the LPSC Rules?

See, our late payment surcharge figure stood at Rs.177 crore till H1, current fiscal. For the Q3, it is Rs.71 crore. So, for nine months, it is Rs.248 crore. So, with the LPSC framework in place, the payment trend has been quite good. So, that is the reason generally in the sector as a whole, for all the generators, if you look at the figure of income from late payment surcharge, it is dwindling. So, to give you an example, in FY20, we had a figure of Rs.1240 crore earnings for nine months. For FY21, it was Rs.1,695 crore and then it started going down, Rs.642 crore, Rs.459 crore, and Rs.186 crore last year, and now it is Rs.248 crore. So, it is a sign of a better collection efficiency.

Thank you. Next question is from the line of Mohit Pandey from Macquarie Capital.

Yes, good evening, sir. Thanks for the question. Firstly, if you could clarify the 7.2 gigawatt of thermal capacity that is to be tendered out by FY27, that will be predominantly on brownfield mode or greenfield also?

No. As I mentioned to you, NTPC is going predominantly for brownfield only. I would say entirely for brownfield. We haven't gone in for any thermal in recent period, which is greenfield. So, yes, it is brownfield only.

Yes, the question pertains to the 7.2 GW that is yet to be tendered, but that clarifies it. So, secondly, with regards to FGDs, while you mentioned the gigawatt under construction, if you could help it, what kind of commissioning is expected over FY26 and FY27?

See, we have broadly two set of FGDs. One is what we are implementing along with the projects. This is the project itself. The one which is being implemented separately for the existing commissioned plants. Now, the entire megawatt capacity of the FGD existing would be 59,880 megawatt, which would constitute roughly an expenditure of Rs.32,800 crore. Now, out of this, 12,120 megawatt of capacity equivalent of FGD has already been under commercial operation as of 31st December 2024, which would be Rs.5,368 crore of approved corresponding cost. Now, if you look at the upcoming COD status for these additional FGDs, 4,360 megawatt we are expecting during the balance part of the current year. For FY26, it would be 13,310 MW. For FY27, it would be 14,110 MW. And FY28, it would be 15,980 MW. So, that totals up to 59,880 megawatt. And if you talk about the corresponding cost of this, I am mentioning only the approved cost, not the completed cost. It could differ slightly. For FY balance, it would be Rs.2,626 crore. Next year, it would be Rs.7,645 crore. FY27, it would be Rs.8,105 crore, FY28, it would be Rs.9,030 crore. These are tentative figures as per the Schedule of Commissioning.

And the last question is on fixed costs under recovery. While we have seen very good progress in this quarter, what will drive further progress, as you indicated, that by the end of the year you plan to get it down to Rs.250 to Rs.300 crore? That would be my last question, sir.

It is based on the ground conditions. Q4 is something where most of our units are up and running. So, this is the period where you have the least planned outages. So, taking into account that we are doing this.

Thank you. Next question is from the line of Aniket Mittal from SBI Mutual Fund. Please go ahead.

Yes Sir. Thank you for the opportunity. So, my first question was on NEEPCO and THDC. I remember earlier you highlighted about 12 gigawatt of additional hydro-based capacity that you want to add over there. Can you give some details on that? When can we expect awarding for those happen and which projects are in advanced stages?

No, no. I didn't mention anything in terms of a fresh award for NEEPCO and THDC. I had given only COD guidance for FY25 and beyond based on already awarded projects.

Are there plans to undertake new projects within that on the hydro side?

I suppose there are some distant projects which are under feasibility study but I can't say anything very categorically at this stage because I don't have the figures right before me right now.

Okay. Just one last book keeping question. You know, on the consolidated financials, the other income has gone down very drastically for the quarter on a Y-o-Y basis. What is leading to that decline?

Yes. The other income was Rs.754.27 crore and now it is Rs.545.13 crore. So, it's a drop by Rs.209 crore. So, the change is contributed by NTPC Rs.118.17 crore, NGEL Rs.65.86 crore. This is because of increase in the interest from bank deposits. RGPPL varies at Rs.30 crore. So, this is the broad breakup for this and this stand's eliminated by Rs.424.71 crore of higher dividend from JVs and subsidiaries. So that brings it to Rs.209 crore.

Thank you. We'll take our next question from the line of Nikhil Nigania from Bernstein. Please go ahead.

My first question is on the Bangladesh plant, the joint venture plant. If you could give some update on what is happening there, what is the status of the plant, any issues you are facing there on that plant?

Yes, I would request Director (Operations), Mr. Ravindra Kumar, who is incidentally on the Board of that company as the Chairman, to take on this question.

Bangladesh plant is commissioned and it was running, but now it is under shutdown for want of coal. Coal is expected to be arriving very soon, so we will start the plant again as per the grid requirement there.

And could you tell us how much investment we have made in terms of equity into that plant? How much investment?

Rs.1,324 crore.

Understood, sir. One last question. There was an article that there were issues with BHEL which were leading to delays in commissioning of plants and a meeting was held. If you could share some color, if there has been any progress or is there a likelihood of further delays in commissioning of the pipeline plants like Patratu, Khurja, etc.?

Director (Projects) will take on this question.

Actually, there was a meeting for the way forward with BHEL. Now BHEL is able to take care of their vendor's cash flows. Earlier, even vendor cash flow was an issue. They are improving on all fronts. You must be knowing Khurja Unit 1 has been commissioned. Today night it will be declared commercial. So there seems to be a positive approach from BHEL and we have to see how it moves. We are planning to commission Patratu Unit 1 in this quarter and North Karanpura Unit 3 also in this quarter. Both are BHEL supplies.

Understood. Those were my questions.

Thank you. Our next question is from the line of Vishal Periwal from Antique Stock Broking. Please go ahead.

Two questions from me. One, on NGEL, you did mention there could be some bit of inorganic growth. So, anything that happens, it will be over and above our capacity addition target of 3 gigawatt, 5 gigawatt, and 8 gigawatt for the next three years?

At this moment, you can assume that all this put together would be above 3 gigawatt.

For the current financial year, since it's only two months down, So I would give you a figure as a guidance that you take a figure of 3 gigawatt rather than asking for a split up in very specific terms.

Okay. Got it, sir. And then second, for this Rajasthan Vidyut, the 50:50 JV that we have done, for our operational assets, so does this involve any investments or will this be part of our control capacity or is this just an O&M that we are doing?

See, there is a thermal plant of 2,320 megawatt operational, and there is always hope for expansion depending on the availability of land and several other inputs. But right now, it would be 2,320 megawatt of operational assets only.

Okay. So, does this involve any investment for this or it will be only for the incremental capex that we are doing that will envisage investment?

No, it is for the existing capacity. It is for the existing capacity of the running plant.

Thank you. We'll take our next question from the line of Sumit Kishore from Axis Capital. Please go ahead.

What kind of investments or capacity additions are envisaged in these JVs of NGEL?

I would put it this way that, there is a planned capacity addition that we have given you guidance in terms of 5 gigawatt, 8 gigawatt, and an average of 8 gigawatt, 7 gigawatt to 8 gigawatt. Now, these are facilitators. This need not be looked at an incremental capacity over and above what we are stating, but these are the aid towards that. These are the avenues for bringing capacity additions, and these are recently formed joint ventures which would involve identification of suitable land, which the respective state government would be bringing to the table and with their own equity participation. So, I won't be able to say in concrete terms in terms of the timelines for this, but definitely all this would become very handy for our targeted capacity of 60 gigawatt by 2032.

Okay, just to understand this, the 3 gigawatt, 5 gigawatt, 8 gigawatt guidance for NGEL is at a consolidated level, including all JVs and potential inorganic growth that you might do will also go towards meeting this target?

I would say that going ahead, most of the expansion would be from NGEL. A chunk of that, I would say, but for the current year, you can take us up for the group, but going ahead, more and more capacity additions would be from the NGEL. But I don't rule out there would be some capacity additions from our subsidiaries, hydro subsidiaries also. Some small capacity addition can come from NTPC also, wherever there is a feasibility in proximity to our existing plants. But the substantial part would, in the future, next two, three years, will come from NGEL.

No. Consideration is something which I will not be sharing at this moment. It is subject to price discovery, modalities and other things. But I will share with you that it is 50% and the capacity is 2,320 megawatt.

Okay. This you had not included in your overall capacity addition for NTPC through FY 27 that you had mentioned earlier. This will be over and above.

Whatever is the capacity addition I shared is about the projects under implementation, this would be over and above that.

Thank you. Ladies and gentlemen, we'll take that as the last question for today. I now hand the conference over to management for closing comments. Over to you, sir.

I along with my colleague Directors here and on behalf of the NTPC and NGEL would like to thank all the participants for raising their queries, very pertinent queries and giving us an opportunity to share our thoughts as well as numbers for your perspective guessing. Thanks a lot.

Thank you. On behalf of IIFL Capital Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. ***************************************

This transcript has been edited for readability and does not purport to be a verbatim record of the proceedings.