NTPC ended 2008 as India’s second-largest company by market value behind Reliance Industries, it was just business as usual at the New Delhi headquarters of the country’s largest power generator. For the leadership team of the company, it was just a validation of things they already knew.
The government-run company has been consistently outperforming the best of Indian companies in the market since the beginning of last year, and it was about to announce 21% higher sales and 26% higher net profit for the third quarter of the fiscal that was coming to a close.
What
sets NTPC apart from other public sector firms and peers in power generation? The company’s rise to prominence seems to have a lot to do with its ability to turn opportunities into successful businesses, which has been the hallmark of its operations ever since it got listed in 2004. NTPC pursued an aggressive expansion plan that saw it diversifying beyond thermal power into some more lucrative operational areas such as hydel power, nuclear energy, power equipment manufacturing, energy trading and coal mining.
Results for the December quarter bear testimony to the robustness of NTPC’s business. While NTPC reported 26% higher net profit, Tata Power, the country’s largest private sector power producer, reported a 49% decline in net profit due to increased expenditure and interest payouts.
NTPC is well on course to increase its generation capacity from 29,894 mw to 50,000 mw by 2012 while other power generators are shelving their projects due to the liquidity crisis. The economic slowdown doesn’t seem to affect NTPC. “We have the financial muscle to go ahead with our expansion plans. And the kind of business we are in, there cannot be a slowdown in demand,” said RS Sharma, chairman and managing director of NTPC.
The company is unlikely to face any problem in tying up funds for its projects. The strong balance sheet of the company facilitates access to low-cost funds to meet the huge outlays required for its massive capacity addition and diversification programmes. NTPC has a debt-equity ratio of 0.52:1, which will allow the company to raise more funds.
This advantage is not enjoyed by several other power companies that face problems in tying up funds for their projects, said Shubhranshu Patnaik, executive director at PricewaterhouseCoopers. While other companies are rationalising their workforce, NTPC is going ahead with additional recruitment. It has recruited 1,225 people in the current year and plans to hire more than 1,000 engineering and management professionals every year.
NTPC’s emergence as a professionally-managed company is getting reflected in its standing among its global peers. According to an analysis carried out by North American Electric Reliability Corporation, NTPC performed better than comparable power utilities abroad on parameters of performance efficiency such as capacity utilisation, unit availability and planned & unplanned outage.
For its nearly 30,000-mw installed capacity, NTPC has been consistently achieving capacity utilisation of over 90%, which is a global benchmark. Some of its stations are operating in the range of 95-100% capacity utilisation.
Part of NTPC’s success may be attributed to the way it manages its human resources. The company has developed a comprehensive training policy for its employees. It has also entered into tie-ups with premier engineering and management institutes to provide long-term educational opportunities.
Such initiatives make NTPC a preferred employer for young professionals. It got special recognition from by Great Places to Work Institute’s India chapter. It topped the category ‘Best workplaces for large organisations’ and stood eighth in overall standings for 2008.
Sceptics might say all such achievements matter less considering the near monopoly being enjoyed by NTPC in a highly-regulated environment. But they can’t deny the fact that no other Indian PSU has delivered such results with the consistency associated with NTPC’s feat.
source : www.economictimes.indiatimes.com/News/News-By-Industry/Energy/Timely-expansion-strategy-powers-NTPCs-bottomline-/articleshow/4289755.cms
The government-run company has been consistently outperforming the best of Indian companies in the market since the beginning of last year, and it was about to announce 21% higher sales and 26% higher net profit for the third quarter of the fiscal that was coming to a close.
What
sets NTPC apart from other public sector firms and peers in power generation? The company’s rise to prominence seems to have a lot to do with its ability to turn opportunities into successful businesses, which has been the hallmark of its operations ever since it got listed in 2004. NTPC pursued an aggressive expansion plan that saw it diversifying beyond thermal power into some more lucrative operational areas such as hydel power, nuclear energy, power equipment manufacturing, energy trading and coal mining.Results for the December quarter bear testimony to the robustness of NTPC’s business. While NTPC reported 26% higher net profit, Tata Power, the country’s largest private sector power producer, reported a 49% decline in net profit due to increased expenditure and interest payouts.
NTPC is well on course to increase its generation capacity from 29,894 mw to 50,000 mw by 2012 while other power generators are shelving their projects due to the liquidity crisis. The economic slowdown doesn’t seem to affect NTPC. “We have the financial muscle to go ahead with our expansion plans. And the kind of business we are in, there cannot be a slowdown in demand,” said RS Sharma, chairman and managing director of NTPC.
The company is unlikely to face any problem in tying up funds for its projects. The strong balance sheet of the company facilitates access to low-cost funds to meet the huge outlays required for its massive capacity addition and diversification programmes. NTPC has a debt-equity ratio of 0.52:1, which will allow the company to raise more funds.
This advantage is not enjoyed by several other power companies that face problems in tying up funds for their projects, said Shubhranshu Patnaik, executive director at PricewaterhouseCoopers. While other companies are rationalising their workforce, NTPC is going ahead with additional recruitment. It has recruited 1,225 people in the current year and plans to hire more than 1,000 engineering and management professionals every year.
NTPC’s emergence as a professionally-managed company is getting reflected in its standing among its global peers. According to an analysis carried out by North American Electric Reliability Corporation, NTPC performed better than comparable power utilities abroad on parameters of performance efficiency such as capacity utilisation, unit availability and planned & unplanned outage.
For its nearly 30,000-mw installed capacity, NTPC has been consistently achieving capacity utilisation of over 90%, which is a global benchmark. Some of its stations are operating in the range of 95-100% capacity utilisation.
Part of NTPC’s success may be attributed to the way it manages its human resources. The company has developed a comprehensive training policy for its employees. It has also entered into tie-ups with premier engineering and management institutes to provide long-term educational opportunities.
Such initiatives make NTPC a preferred employer for young professionals. It got special recognition from by Great Places to Work Institute’s India chapter. It topped the category ‘Best workplaces for large organisations’ and stood eighth in overall standings for 2008.
Sceptics might say all such achievements matter less considering the near monopoly being enjoyed by NTPC in a highly-regulated environment. But they can’t deny the fact that no other Indian PSU has delivered such results with the consistency associated with NTPC’s feat.
source : www.economictimes.indiatimes.com/News/News-By-Industry/Energy/Timely-expansion-strategy-powers-NTPCs-bottomline-/articleshow/4289755.cms
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