NTPC Reports Negative Financial Performance in Q2 FY25, Interest Costs and Cash Flow Decline

NTPC, a largecap power generation and distribution company, has recently declared its financial results for the quarter ending September 2024. According to the data, the company has seen a negative financial performance with a score of -10, falling from 0 in the last three months.

One of the major factors contributing to this decline is the Profit Before Tax (PBT) less Other Income, which has fallen by -31.29% Year on Year (YoY) to Rs 4,208.78 crore. This trend is expected to continue in the near term, indicating a negative outlook for the company.

Another concerning aspect is the company’s Operating Profit to Interest ratio, which is at its lowest in the last five quarters at 3.22 times. This suggests that NTPC’s ability to manage interest payments is deteriorating.

Furthermore, the company’s Operating Cash Flow has also seen a decline, reaching its lowest at Rs 40,784.59 crore in the last three years. This indicates a decrease in cash revenues from business operations.

NTPC’s interest cost has also increased by 15.46% (QoQ), reaching its highest at Rs 3,620.58 crore in the last five quarters. This rise in interest cost signifies increased borrowings by the company.

Moreover, NTPC’s Operating Profit Margin has also hit its lowest at 26.08% in the last five quarters, indicating a decline in the company’s efficiency.

Overall, NTPC’s financial performance for the quarter ending September 2024 has been negative, with a decrease in PBT and cash flow, and an increase in interest cost. MarketsMOJO has given a ‘Hold’ call for the company’s stock, suggesting a cautious approach for investors.