This document contains Discounted cash flow (DCF) analysis of NTPC which tells future free cash flow projections and discounts them (most often using the weighted average cost of capital) to arrive at a present value, which is used to evaluate the potential for investment. If the value arrived at through DCF analysis is higher than the current cost of the investment, the opportunity may be a good one. Note: 1) The figures of Balance Sheet, Profit and Loss and Cash Flow Statements are in crores. 2) For reference XL sheet is attached in this document ,where it included all the calculations to arrive Discounted Cash Flow of NTPC.

1. Project on
Discounted cash flows for NTPC company
SYMBIOSIS INSTITUTE OF BUSINESS
MANAGEMENT(Hyderabad)
Submitted to
Prof.Prabhakar Sir
Shreya Banerjee
Shahid Hassan

2. Balance Sheet
Mar '14 Mar '13 Mar '12 Mar '11 Mar '10
SourcesOf Funds
Total Share Capital 8,245.46 8,245.46 8,245.46 8,245.46 8,245.50
EquityShare Capital 8,245.46 8,245.46 8,245.46 8,245.46 8,245.50
Share ApplicationMoney 0 0 0 0 0
Preference Share Capital 0 0 0 0 0
Reserves 77,569.86 72,142.05 65,045.71 59,646.79 55,478.60
Networth 85,815.32 80,387.51 73,291.17 67,892.25 63,724.10
SecuredLoans 12,311.00 9,404.05 9,156.30 30,558.47 9,079.90
UnsecuredLoans 50,094.75 43,849.61 36,751.97 9,177.21 28,717.10
Total Debt 62,405.75 53,253.66 45,908.27 39,735.68 37,797.00
Total Liabilities 1,48,221.07 1,33,641.17 1,19,199.44 1,07,627.93 1,01,521.10
ApplicationOf Funds
Gross Block 1,16,855.56 1,03,124.82 81,723.48 72,665.61 66,663.80
Less:Revaluation
Reserves 0 0 0 0 0
Less:Accum.
Depreciation 44,744.73 40,188.72 36,465.12 33,429.65 32,088.80
NetBlock 72,110.83 62,936.10 45,258.36 39,235.96 34,575.00
Capital Workin Progress 44,888.67 37,109.42 41,827.86 35,495.33 32,290.60
Investments 9,757.86 10,760.10 11,206.38 12,344.84 14,807.10
Inventories 5,373.35 4,057.19 3,702.85 3,639.12 3,347.70
SundryDebtors 5,220.08 5,365.49 5,832.51 1,434.96 6,651.40
Cash andBank Balance 15,311.37 16,867.70 16,146.11 16,185.26 634
Total CurrentAssets 25,904.80 26,290.38 25,681.47 21,259.34 10,633.10
Loans andAdvances 26,892.02 24,020.46 16,863.73 17,403.41 6,357.10
FixedDeposits 0 0 0 0 13,825.50
Total CA,Loans &
Advances 52,796.82 50,310.84 42,545.20 38,662.75 30,815.70
Deferred Credit 0 0 0 0 0
CurrentLiabilities 23,151.15 19,730.83 17,819.04 15,358.52 7,896.80
Provisions 8,181.96 7,744.46 3,819.32 2,752.43 3,070.50
Total CL & Provisions 31,333.11 27,475.29 21,638.36 18,110.95 10,967.30
NetCurrentAssets 21,463.71 22,835.55 20,906.84 20,551.80 19,848.40
MiscellaneousExpenses 0 0 0 0 0
Total Assets 1,48,221.07 1,33,641.17 1,19,199.44 1,07,627.93 1,01,521.10
ContingentLiabilities 81,582.53 73,660.54 53,173.05 44,055.80 40,044.00
BookValue (Rs) 104.08 97.49 88.89 82.34 77.28

3. Balance Sheet (Contd..)
Mar '09 Mar '08 Mar '07 Mar '06 Mar '05
SourcesOf Funds
Total Share Capital 8,245.50 8,245.50 8,245.50 8,245.50 8,245.50
EquityShare Capital 8,245.50 8,245.50 8,245.50 8,245.50 8,245.50
Share ApplicationMoney 0 0 0 0 0
Preference Share Capital 0 0 0 0 0
Reserves 50,749.40 46,021.90 40,351.30 36,713.20 33,530.80
Networth 58,994.90 54,267.40 48,596.80 44,958.70 41,776.30
SecuredLoans 8,969.60 7,314.70 7,479.60 6,173.50 4,778.10
UnsecuredLoans 25,598.20 19,875.90 17,661.50 14,464.60 12,647.10
Total Debt 34,567.80 27,190.60 25,141.10 20,638.10 17,425.20
Total Liabilities 93,562.70 81,458.00 73,737.90 65,596.80 59,201.50
ApplicationOf Funds
Gross Block 62,353.00 53,368.00 50,604.20 45,917.60 42,996.10
Less:RevaluationReserves 0 0 0 0 0
Less:Accum. Depreciation 29,415.30 27,274.30 25,079.20 22,950.10 20,791.40
NetBlock 32,937.70 26,093.70 25,525.00 22,967.50 22,204.70
Capital Workin Progress 26,404.90 22,478.30 16,962.30 13,756.00 10,038.60
Investments 13,983.50 15,267.20 16,094.30 19,289.10 20,797.70
Inventories 3,243.40 2,675.70 2,510.20 2,340.50 1,777.70
SundryDebtors 3,584.20 2,982.70 1,252.30 867.8 1,374.70
Cash andBank Balance 271.8 473 750.1 176.8 367.3
Total CurrentAssets 7,099.40 6,131.40 4,512.60 3,385.10 3,519.70
Loans andAdvances 7,826.10 9,936.20 8,781.70 6,555.10 5,491.10
FixedDeposits 15,999.80 14,460.20 12,564.50 8,294.60 5,711.00
Total CA,Loans & Advances 30,925.30 30,527.80 25,858.80 18,234.80 14,721.80
DeferredCredit 0 0 0 0 0
CurrentLiabilities 7,439.20 5,548.40 5,422.20 4,910.30 5,884.60
Provisions 3,249.50 7,360.60 5,280.30 3,740.30 2,676.70
Total CL & Provisions 10,688.70 12,909.00 10,702.50 8,650.60 8,561.30
NetCurrentAssets 20,236.60 17,618.80 15,156.30 9,584.20 6,160.50
MiscellaneousExpenses 0 0 0 0 0
Total Assets 93,562.70 81,458.00 73,737.90 65,596.80 59,201.50
ContingentLiabilities 66,083.20 29,361.80 25,218.80 16,429.80 16,680.00
BookValue (Rs) 71.55 65.81 58.94 54.53 50.67

4. Profit and Loss
Mar '14 Mar '13 Mar '12 Mar '11 Mar '10
Income
SalesTurnover 72,018.93 65,673.93 62,052.23 55,062.65 46,623.60
Excise Duty 0 0 0 0 245.9
NetSales 72,018.93 65,673.93 62,052.23 55,062.65 46,377.70
OtherIncome 2,688.89 4,785.69 2,778.42 2,344.65 2,872.80
Stock Adjustments 0 0 0 0 0
Total Income 74,707.82 70,459.62 64,830.65 57,407.30 49,250.50
Expenditure
Raw Materials 47.6 46.35 45.24 31.33 31.1
Power& Fuel Cost 46,510.29 41,661.34 42,171.65 35,796.37 29,689.10
Employee Cost 3,867.99 3,360.12 3,090.48 2,789.71 2,946.80
OtherManufacturingExpenses 0 0 0 0 1,096.60
SellingandAdminExpenses 0 0 0 0 578.5
MiscellaneousExpenses 3,815.67 3,521.78 3,007.36 4,472.36 436.4
PreoperativeExp Capitalised 0 0 0 0 -866.9
Total Expenses 54,241.55 48,589.59 48,314.73 43,089.77 33,911.60
OperatingProfit 17,777.38 17,084.34 13,737.50 11,972.88 12,466.10
PBDIT 20,466.27 21,870.03 16,515.92 14,317.53 15,338.90
Interest 2,406.59 1,924.36 1,711.64 1,420.96 1,861.90
PBDT 18,059.68 19,945.67 14,804.28 12,896.57 13,477.00
Depreciation 4,142.19 3,396.76 2,791.70 2,485.69 2,650.10
OtherWrittenOff 0 0 0 0 4.3
ProfitBefore Tax 13,917.49 16,548.91 12,012.58 10,410.88 10,822.60
Extra-ordinaryitems -12.84 29.72 313.58 1,638.72 616.1
PBT (PostExtra-ordItems) 13,904.65 16,578.63 12,326.16 12,049.60 11,438.70
Tax 2,929.91 3,959.24 3,102.43 2,947.01 2,682.70
ReportedNetProfit 10,974.74 12,619.39 9,223.73 9,102.59 8,728.20
Total Value Addition 54,193.95 48,543.24 48,269.49 43,058.44 33,880.50
Preference Dividend 0 0 0 0 0
EquityDividend 4,741.15 4,741.16 3,298.19 3,133.26 3,133.20
Corporate DividendTax 804.74 781.87 527.92 514.77 527.6
Pershare data (annualised)
Sharesinissue (lakhs) 82,454.64 82,454.64 82,454.64 82,454.64 82,454.64
EarningPer Share (Rs) 13.31 15.3 11.19 11.04 10.59
EquityDividend(%) 57.5 57.5 40 38 38
BookValue (Rs) 104.08 97.49 88.89 82.34 77.28

5. Profit and Loss statement(Contd..)
Mar '09 Mar '08 Mar '07 Mar '06 Mar '05
Income
SalesTurnover 42,196.80 37,302.40 32,817.30 26,318.60 22,565.00
Excise Duty 221.6 211.4 185.6 175.7 0
NetSales 41,975.20 37,091.00 32,631.70 26,142.90 22,565.00
OtherIncome 3,012.80 3,119.70 2,875.60 2,897.90 2,438.60
Stock Adjustments 0 0 0 0 0
Total Income 44,988.00 40,210.70 35,507.30 29,040.80 25,003.60
Expenditure
Raw Materials 31 26.8 23.7 25 17.9
Power& Fuel Cost 27,292.30 22,160.70 19,947.60 16,497.10 13,804.10
Employee Cost 2,897.60 2,229.30 1,362.60 1,137.50 997.1
OtherManufacturingExpenses 940 920 842.9 705.1 586.7
SellingandAdminExpenses 473.2 389.8 410.8 353.2 -284.9
MiscellaneousExpenses 394.9 368.2 292.4 247.2 205.8
PreoperativeExpCapitalised -637.4 -544.7 -418.4 -256.4 -74.8
Total Expenses 31,391.60 25,550.10 22,461.60 18,708.70 15,251.90
OperatingProfit 10,583.60 11,540.90 10,170.10 7,434.20 7,313.10
PBDIT 13,596.40 14,660.60 13,045.70 10,332.10 9,751.70
Interest 1,737.00 1,982.20 2,055.70 2,004.60 1,701.60
PBDT 11,859.40 12,678.40 10,990.00 8,327.50 8,050.10
Depreciation 2,364.50 2,138.50 2,075.40 2,047.70 1,958.40
OtherWrittenOff 3.6 3.1 9.9 1.3 0.4
ProfitBefore Tax 9,491.30 10,536.80 8,904.70 6,278.50 6,091.30
Extra-ordinaryitems 1,305.20 -114 134.2 633.7 574.7
PBT (PostExtra-ordItems) 10,796.50 10,422.80 9,038.90 6,912.20 6,666.00
Tax 2,554.70 2,994.20 2,163.70 1,082.40 834.8
ReportedNetProfit 8,201.30 7,414.80 6,864.70 5,820.20 5,807.00
Total Value Addition 31,360.60 25,523.30 22,437.90 18,683.70 15,234.00
Preference Dividend 0 0 0 0 0
EquityDividend 2,968.30 2,885.90 2,638.50 2,308.70 1,979.00
Corporate DividendTax 501.7 490.5 389.6 323.8 268
Sharesinissue (lakhs) 82,454.64 82,454.64 82,454.64 82,454.64 82,454.64
EarningPer Share (Rs) 9.95 8.99 8.33 7.06 7.04
EquityDividend(%) 36 35 32 28 24
BookValue (Rs) 71.55 65.81 58.94 54.53 50.67

6. Cash Flow Statements
Mar '14 Mar '13 Mar '12 Mar '11 Mar '10
NetProfitBefore Tax 13904.65 16578.63 12326.16 12049.6 10807.6
NetCash FromOperatingActivities 15732.18 15495.17 13866.57 11085.03 10594.2
NetCash (usedin)/from
InvestingActivities -13979.7 -14016.9 -11036.6 -7655.69
-
10497.7
NetCash (usedin)/fromFinancingActivities -3308.99 -752.41 -2869.11 -1703.56 -1908.6
Net(decrease)/increaseInCashandCash Equivalents -1556.33 725.87 -39.15 1725.78 -1812.1
OpeningCash& CashEquivalents 16867.7 16141.83 16185.26 14459.48 16271.6
ClosingCash& Cash Equivalents 15311.37 16867.7 16146.11 16185.26 14459.5
Mar '09 Mar '08 Mar '07 Mar '06 Mar '05
NetProfitBefore Tax 9467.8 10529.4 8896.5 6271.2 6068
NetCash FromOperatingActivities 9688.1 10171.1 8065.3 6206.4 5047.3
NetCash (usedin)/from
InvestingActivities -7500.4 -6203.8 -3145.8 -2713.6 -6417.9
NetCash (usedin)/fromFinancingActivities -849.3 -2348.7 -76.3 -1099.7 813.8
Net(decrease)/increaseInCashandCash Equivalents 1338.4 1618.6 4843.2 2393.1 -556.8
OpeningCash& CashEquivalents 14933.2 13314.6 8471.4 6078.3 6635.1
ClosingCash& Cash Equivalents 16271.6 14933.2 13314.6 8471.4 6078.3

7. FinancialModelling
Mar '14 Mar '13 Mar '12 Mar '11 Mar '10
SalesTurnOver 72,018.93 65,673.93 62,052.23 55,062.65 46,623.60
Year on Year Growth 10% 6% 13% 18% 10%
Total Expenses 54,241.55 48,589.59 48,314.73 43,089.77 33,911.60
Total Expenses/Sales 75% 74% 78% 78% 73%
Year On Year Growthof Expenses 12% 1% 12% 27% 8%
NetFixedAssets 72,110.83 62,936.10 45,258.36 39,235.96 34,575.00
NetFixed Assets/Sales 100% 96% 73% 71% 74%
Depreciation 4,142.19 3,396.76 2,791.70 2,485.69 2,650.10
Depreciationishowmuchuponnetfixedassets 6% 5% 6% 6% 8%
CurrentAssets 25,904.80 26,290.38 25,681.47 21,259.34 10,633.10
percentage of current assetsuponsales 36% 40% 41% 39% 23%
39%
CurrentLiabilities 23,151.15 19,730.83 17,819.04 15,358.52 7,896.80
percentage of currentLiabilitiesuponsales 32% 30% 29% 28% 17%
32%
WorkingCapital 2,753.65 6,559.55 7,862.43 5,900.82 2,736.30
NetProfit 10,974.74 12,619.39 9,223.73 9,102.59 8,728.20
15% 19% 15% 17% 19%
15%

8. Mar '09 Mar '08 Mar '07 Mar '06 Mar '05
SalesTurnOver 42,196.80 37,302.40 32,817.30 26,318.60 22,565.00
Year on Year Growth 13% 14% 25% 17%
Total Expenses 31,391.60 25,550.10 22,461.60 18,708.70 15,251.90
Total Expenses/Sales 74% 68% 68% 71% 68%
Year On Year Growthof Expenses 23% 14% 20% 23%
NetFixedAssets 32,937.70 26,093.70 25,525.00 22,967.50 22,204.70
NetFixed Assets/Sales 78% 70% 78% 87% 98%
Depreciation 2,364.50 2,138.50 2,075.40 2,047.70 1,958.40
Depreciationishowmuchuponnetfixed
assets 7% 8% 8% 9% 9%
CurrentAssets 7,099.40 6,131.40 4,512.60 3,385.10 3,519.70
percentage of currentassetsupon sales 17% 16% 14% 13% 16%
CurrentLiabilities 7,439.20 5,548.40 5,422.20 4,910.30 5,884.60
percentage of currentLiabilitiesuponsales 18% 15% 17% 19% 26%
WorkingCapital -339.80 583.00 -909.60 -1,525.20 -2,364.90
NetProfit 8,201.30 7,414.80 6,864.70 5,820.20 5,807.00
19% 20% 21% 22% 26%

9. Predicted Performance Of the Company
2015 2016 2017 2018 2019 2020
EstimatedSales 79941.01 87135.7 97591.99 107351.2 120233.3 133459
EstimatedYearon Year Growth 11% 9% 12% 10% 12% 11%
ExpectedExpenses 60208.12 65626.85 73502.07 80852.28 90554.55 100515.6
EBITDA 19732.89 21508.85 24089.91 26498.91 29678.77 32943.44
How much% EBITDA of EstimatedSales 25% 25% 25% 25% 25% 25%
ExpectedNetFixedAssets 69762.27 76040.87 85165.78 93682.35 104924.2 116465.9
ExpectedDepreciation 4303.19 4690.477 5253.334 5778.668 6472.108 7184.04
EBIT 65459.08 71350.39 79912.44 87903.69 98452.13 109281.9
ExpectedCurrentAssets 31176.99 33982.92 38060.88 41866.96 46891 52049.01
ExpectedCurrentLiabilities 25581.12 27883.43 31229.44 34352.38 38474.67 42706.88
ExpectedWorkingCapital 5595.871 6099.499 6831.439 7514.583 8416.333 9342.13
ExpectedNetProfit 11991.15 13070.36 14638.8 16102.68 18035 20018.85
Change inworkingCapital 503.6284 731.9399 683.1439 901.75 925.7966

10. Discounted Cash Flows
Lets us see the formulas to calculate DiscountedCash flows
Effective Tax rate 26%
Tax Shield=InterestExpense XEffective Tax Rate
Free CashFlow= NetIncome + InterestExpense - NetCapex - ChangesinworkingCapital - Tax Shield
PV of FCF=FCF/(1+r)^t
WACC 9%
Terminal Growthrate 8%
TV = FCF inLast Year(1+ Terminal GrowthRate)/(WACC-Terminal GrowthRate)
PV of Terminal Value=Terminal Value/LastyearDiscountingFactor
DCF Value of Company=PV of Terminal Value+Sumof PV Of terminal Value
No of outstandingShares=PAT/EPS 824.5485
DCF PerShare=DCFValue of a company/Noof outstandingshares
Market Price 152.4
DCF PerShare = DCF Value of Company/Noof OutstandingShares
1)What is a Free Cash Flow?
A measure of financial performance calculated as operating cash flow minus capital
expenditures. Free cash flow (FCF) represents the cash that a company is able to
generate after laying out the money required to maintain or expand its asset base.
2) What is a Terminal Value?
The terminal value (continuing value or horizon value) is the present value at a
future point in time of all future cash flows when we expect stable growth rate forever.

11. 3)What is DCF Value of a Company?
Discounted cash flow (DCF) analysis uses future free cash flow projections and
discounts them (most often using the weighted average cost of capital) to arrive at a
present value, which is used to evaluate the potential for investment. If the value
arrived at through DCF analysis is higher than the current cost of the investment, the
opportunity may be a good one.
Discounted Cash Flow Working
2015 2016 2017 2018 2019
1 2 3 4 5
Sales 79941.01 87135.7 97591.99 107351.2 120233.3
NetProfit 11991.15 13070.36 14638.8 16102.68 18035
InterestExpense 2165.48 2210.5 2405.2 2410.54 2510.4
NetCapital Expenditure 12055.69 12036.61 13016.89 14979.71 15020.31
Change inWorkingCapital 503.6284 731.9399 683.1439 901.75 925.7966
Tax Shiled 563.0248 574.73 625.352 626.7404 652.704
Free CashFlow 1034.289 1937.576 2718.612 2005.018 3946.589
DiscountingFactors(1+r)^t 1.09 1.1881 1.295029 1.411582 1.538624
PV of Future FCF 948.8887 1630.819 2099.267 1420.405 2565.012
Sumof PV of FCF 8664.392
Terminal Value 277021.3
PV of Terminal Value 180044.8
DCF Value of Company 188709.2
No of OutstandingSharesCrores 824.5485
DCF PerShare 228.8637
As the Value arrived through DCF analysisis higherthan the Market Price ,the Opportunity may be
good
The above Calculation has been recorded in Xlsheet and is
attached below for your reference
Ntpc_Financial_Mo
delling.xlsx