(48th Annual General Meeting | 29.08.2024)
Dear Shareholders,
A very good morning and a warm welcome to you all to the 48th Annual General Meeting of your company.
India remains the fastest-growing large economy, with a GDP growth estimated at 8.2% in FY24. Your company has successfully harnessed this momentum. Our generation continued to grow strongly, our capacity expansion pipeline grew significantly, our bottom line grew robustly, we broke ground with more partnerships and the market rewarded our shareholders handsomely. We thank our stakeholders for staying with us on this incredible journey and giving us strong support all the way.
This has been possible because we maintained sharp focus on our core agenda of building a resilient and reliable business driven by prudence, agility, and commitment to excellence. Today, I am happy to share with you the progress we have made, the challenges we have overcome, and our vision for the future.
During the year, our market capitalization touched an all-time high, which is a testimony to the company's sound financial management and its long-term growth plans. The company’s share has yielded almost 100% returns in the past year. I want to personally thank each of you for your continued trust in our performance and our strategic direction.
We have expanded our existing portfolios and maintained a strong focus on improving the availability of our stations through best-in-class Operation and Maintenance practices. Our careful cost management and operational efficiencies have also contributed to achieving our highest-ever profit.
We have been vigilant in monitoring the fuel supply situation and have taken proactive measures to ensure sufficient fuel stocks at our stations thereby safeguarding the country’s energy security. Due to our consistent efforts, none of our stations have witnessed fuel shortages over the past year and we continue to maintain adequate stocks.
We are continuously evaluating our existing practices to enhance our safety measures. We have implemented rigorous safety protocols, devised training modules for imparting training to all the employees including contractual workers and investing in state-of-the-art technologies to maintain a safe working environment.
As we look ahead, we are focused on building on the strong foundation with a clear strategy to drive sustainable growth and deliver long-term value to our shareholders. We remain committed to exceed your expectations.
Some of the significant achievements during the last year are:
- We achieved generation of 422 Billion Units of electricity, registering a growth of ~6% year-on-year. Further, we have registered a generation growth of 9.49% in Q1FY25.
- In FY24, our coal stations registered a Plant Load Factor of 77.25% against a national PLF of 69.09% and ten of our coal stations figured in the top twenty-five best-performing stations of the country in terms of PLF. This is a testimony to our sound O&M practices and the capability of our employees to operate power stations efficiently and economically.
- We added 3924 MW capacity, taking the total installed capacity to 76+ GW. The addition includes both coal-based power plants and Renewable energy capacity. We plan to add around 7 GW of capacity this year.
- We are close to commissioning of a 1000 MW Pumped Storage Project at the existing Tehri hydro project complex, the largest in the country. Additionally, the Government of Tamil Nadu has allocated 1000 MW Upper Bhavani PSP to be executed by the existing JV. With the current plan, your company’s fossil and non-fossil capacity mix is expected to be nearly 60:40 by 2032.
- On the renewable front, we have 3.7 GW of operational capacity, 9.2 GW under construction and 12 GW in bidding / planning stage. We made several new partnerships in the renewable segment including C&I consumers. Additionally, we are also working on the storage front to capitalize on the opportunities going forward.
- During FY24, we achieved coal despatch of 34.15 MMT from our captive mines, registering over 50% growth when compared to FY23. We are the third largest coal producer in the country. This accounts for nearly 13% of our total coal consumption. In Q1 FY25, we achieved a coal dispatch of 10.19 MMT and registered a growth of 17.15% Y-o-Y.
- We have set an ambitious coal production target of 42 MMT for FY25. Looking ahead, we are strategizing to fulfill a minimum 25% of our coal requirement through captive mines by FY30.
- Our standalone credit profile which was ‘bbb-‘ and at par with the Sovereign rating, has been raised to ‘bbb’ by the rating agency Fitch.
- Our commitment to high standards of corporate governance has been recognized by the Gold Award for Annual Report at the "Corporate Governance Disclosures Competition 2022," organized by the South Asian Federation of Accountants (SAFA). Additionally, the company's Internal Audit department was honoured with the "Internal Auditor of the Year" award at the 5th Audit and Risk Summit & Awards.
- For the 7th time we have received ATD BEST Awards which showcases our excellence in talent development. NTPC is also certified as a “Top Employer 2024” in India by Brandon Hall Group.
Financial performance
Your company's balance sheet continues to grow stronger, reflecting financial strength and stability. For FY24, your company achieved a consolidated PAT of ₹21,332 Crore, marking a 25% increase over FY23. We realized over 100% of our current billing, with total realizations reaching ₹1,57,138 Crore. Our debtors stand at just 31 days of average billing. Our profit and robust cash flows help us maintain our high growth momentum.
Our focused efforts to improve the performance of our Joint Ventures and Subsidiaries has also paid off. Our share of accounted profits in these entities stands at ₹5,533 crore, up from ₹2,246 crore in the previous year. This substantial increase highlights the success of our strategic investments and their positive impact on our overall financial performance.
We remain committed to enhancing financial performance, delivering consistent returns to our shareholders, and upholding our reputation as a trusted leader in the energy industry. This commitment is once again demonstrated by the declaration of a dividend for the 31st consecutive year, with a proposed total dividend of ₹7.75 per equity share for FY24, subject to shareholders' approval. This dividend payout represents nearly 42% of our profit, underscoring our commitment in rewarding our shareholders.
Growth opportunities
One key event this past year was the issuance of new Tariff Regulations by the Central Electricity Regulatory Commission for the period 2024-29, starting from April 1, 2024. These forward-looking regulations address the sector's evolving needs and are expected to support our continued growth.
As the country aims to be the third largest economy by FY28, the growth of power sector will also be high. While the Government of India has put in place policies and reform measures for growth of the power sector, we continue to ensure that the power requirements of the country are met seamlessly.
To meet the growing energy needs and in line with the plans finalised by the Government, on the thermal capacity front, we are focused on completing our existing pipeline of 9.5 GW, with tenders issued for an additional 10.4 GW of capacity.
We are on track to achieve our committed 60 GW of renewable capacity by 2032. To accelerate this growth, we are continually evolving our strategies and business models. Our focus has shifted from the traditional EPC model to sourcing components and aggregating resources, such as solar PV modules, land patches, and connectivity. Our extensive presence across the country gives us a unique advantage in collaborating with State Governments to secure land, which we are leveraging effectively. We are also developing capacities through partnerships. Additionally, we are aggressively working on setting up storage capacity at our power stations.
I am also happy to share with you that NTPC is in the forefront of India’s clean energy transition by leading initiatives in green hydrogen, green chemicals and carbon capture and utilization. Towards this endevour, we have joined hands with leading players in the energy sector like IOCL, ONGC, NALCO and HPCL Mittal Energy etc. These partnerships will be mutually beneficial and contribute to India’s goal of achieving a carbon neutral economy.
With our strong focus on non-fossil capacity, we are on the verge of commencing work on the 2.8 GW Mahi Banswara nuclear project in Rajasthan through ASHVINI, a joint venture between NTPC and the Nuclear Power Corporation of India, with an estimated investment of ₹50,000 Crore. In parallel, we are taking steps to form a separate subsidiary dedicated to nuclear business. Additionally, we are fast-tracking various projects with an aggregated capacity of 12 GW by FY30 through our subsidiaries THDC and NEEPCO. We have laid out a firm plan to achieve a capital expenditure of ₹7 lakh crore by FY32.
Our employees are our best assets, and we are committed to maintain and enhance their talent at the highest levels. We have integrated advanced technological tools into our learning modules and partnered with leading institutions to offer training in the latest technologies.
To ensure we are future-ready, we keep investing in reskilling, redeploying, and hiring fresh talent to meet our evolving business needs. These initiatives position us for success in the dynamic energy landscape while contributing to a sustainable and prosperous future for all.
Sustainability
Our commitment to ESG is reflected in our focus on environmental responsibility, social development, and strong corporate governance. Corporate Governance Report forms part of Annual Report and details out governance practices along with Certificate of Compliance of Conditions of Corporate Governance.
From reducing water consumption and implementing advanced emission control technologies to impactful CSR initiatives, we are actively contributing to a sustainable future for India. This dedication is evident in our improved ESG score, with NTPC's Carbon Disclosure Project (CDP) Water Security Rating rising from “D” in 2022 to “C” in 2023.
In our efforts to create additional carbon sinks, we have planted over 1 million trees in the last fiscal year. We are also participating in the Green Credit Program of the Government of India for the eco-restoration of degraded forest lands on a voluntary basis, promoting sustainable lifestyles and environmental conservation as part of the ‘LiFE’ initiative.
Our CSR initiatives prioritize health, sanitation, education, sports, skill development, and women empowerment, promoting social well-being alongside economic growth. Our Girl Empowerment Mission (GEM), which aims to create a brighter future for girls and society, has grown into a nationwide movement, benefiting more than 10,000 girls across India. Additionally, your company has adopted archery as a sport in India, consistently supporting Indian archers who have won several medals in international tournaments.
We are committed to sustainable wealth creation for all our stakeholders by adopting best practices. Transparency, accountability, fairness, and extensive communication with stakeholders are integral to our functioning.
Way forward
To ensure our leadership position in the sector, we maintain a strong focus on timely project delivery and maintaining a strong growth pipeline.
Your company remains committed to innovation and excellence in the ever-evolving energy landscape. Guided by our core values, we are consistently exploring new opportunities for responsible and sustainable growth. As India, home to nearly one-sixth of the global population, aspires to become a developed nation by 2047, the need for significant infrastructure development and an expanded manufacturing base will drive a substantial increase in energy demand.
As a forward-looking organization, we are actively exploring and working on pioneering technologies in the energy domain, including green hydrogen, nuclear power, small modular reactors (SMR), CO2 storage, and green chemicals, including Sustainable Aviation Fuel. As India's largest power utility, NTPC is poised for significant growth in the coming years. Our expertise in the power sector, combined with India's demographic advantage of a large and young population, positions us to capitalize on the huge demand for electricity, driving rapid growth in the power sector.
Acknowledgement
I extend my heartfelt gratitude to the Government of India, especially the Ministry of Power, Ministry of Coal, Ministry of Railways, Ministry of Environment, Forest, and Climate Change, Ministry of New and Renewable Energy, DIPAM, CERC, CEA, CAG, State Governments, our esteemed Customers, Auditors, Vendors, and other authorities and agencies for their unwavering support.
I also want to acknowledge and thank my fellow Board members for their invaluable contributions in strengthening the Company. I deeply appreciate the trust and support of our investors, shareholders, vendors, customers, and employees.
Your strong and continued support has played a pivotal role in our achievements, and I am sure that the same will continue in the years to come.
Thank you!
Gurdeep Singh
Chairman & Managing Director