A PRESENTATION ON ANALYSIS AND

STRATEGIES OFNTPC LTD

Presented by : Fenil Shah (9082) Kirtan Shah (9084) Hardik Surati (9105) Jimmy Vohera(9112)

Flow of Presentation:

• Introduction to the Power Industry.• Introduction to the NTPC LTD.• PESTEL Analysis.• SWOT Analysis.• Strategies of NTPC LTD.

INTRODUCTION TO POWER INDUSTRY

India has the fifth largest generation capacity in the world with an installed capacity of 152 GW as on 30 September 2009, which is about 4 percent of global power generation.

The average per capita consumption of electricity in India is estimated to be 704kWh during 2008-09. However, this is fairly low when compared to that of some of the developed and emerging nations such US (~15,000 kWh) and China (~1,800 kWh).

The Target Mission: ‘POWER for all by 2012’ would mean achieving the target of 1000 KH (Units) of per capita consumption of electricity by this period.

Major Players:

1. NTPC(National Thermal Power Corporation Ltd)

2. NHPC Limited (National Hydroelectric Power Corporation Ltd.)

3. NPCIL(Nuclear Power Corporation of India Limited.)

4. POWERGRID

5. RELIANCE POWER LTD.

6. SUZLON LTD

Established in 1975, one of the global giants in power sector

NTPC‟s core business is engineering, construction and operation of power generating plants.

Current installed capacity of NTPC is 27,904 MW through its 15 coal based (22,895 MW), 7 gas based (3,955 MW) and 4 Joint Venture Projects (1,054 MW).

INTRODUCTION TO NTPC:

VISION AND MISSION OF NTPC :

VISION: “To be one of the world’s largest and best power utilities, powering India’s growth.”

MISSION: “Develop and provide reliable power, related products and services at competitive prices, integrating multiple energy sources with innovative and eco–friendly technologies and contribute to society" 

CORPORATE OBJECTIVES Business portfolio growth

- Establish a presence in hydropower segment

- To establish a strong brand in international markets.

Customer focus

- To foster a collaborative style of working with customer and to expand

- To expand the relationship with customers by offering other services like trading, energy consulting, distribution consulting etc

Agile corporation

- To develop a learning organization having knowledge based competitive edge in current and future businesses.

- To effectively leverage information technology to ensure speedy decision making across the organization.

Performance leadership

- To continuously improve on project execution time and cost

- To aim for performance excellence in the diversification businesses

Sustainable development

- To contribute to sustainable power development by discharging CSR.

Research and development

- To pioneer the adoption of reliable, efficient and cost-effective technologies

- To disseminate the technologies to other players in the sector and in the long-run generating revenue through proprietary technologies.

 

CORE VALUES

B-Business Ethics C-Customer Focus O-Organizational & Professional pride M-Mutual Respect and Trust I- Innovation & Speed T-Total quality for Excellence

PESTEL ANALYSIS:

Political factor

The Government of India has a mission of ‘POWER FOR ALL BY 2012’. Installed generation capacity to be increased 2, 00,000 MW by 2012 from the

present level of 1, 14,000 MW. Governement is having very ambitious plans for increasing the capacity of the

power sector and hence is encouraging power sector companies

Economic Factors

India is in the rising phase of its economy curve, the economy of the country was growing at 9 % before it is affected by recession in 2008. Even during recession also it managed to touch 7.9% in the last quarter (July-Sep 2009) while developed countries suffering from negative growth.

The per capita consumption is expected to increase 1000 KWH. So, this provides huge opportunity for NTPC.

Socio cultural factors With a population of India increasing and the scenario of the country is

changing from survival to consumption mode, the demand for electricity continue to be on increase. As a result of which power generation sector promises increasing returns to those who have already positioned themselves strongly in this sector.

Technological factors: The operational efficiency of a thermal power plant is only 30% that is very

poor Also, the advantages of low installation cost is disserted with the invention

of nuclear power

Ecological factors: Thermal power plants produce co2, so2 and other gases which are

hazardous to the environment. After COPENHAGEN Climate Conference it became more imperative for the govt. to reduce pollution. This might put pressure on NTPC to go for alternatives.

Legal factors:

Legal factors that main hindrance to enter this industry primarily licenses, environment protections laws and work safety laws. This is the reason why the most of private companies although ventured a decade ago still they are thriving for success.

SWOT ANAYLSIS

Strengths

Largest market share in domestic power generation and a broad customer portfolio across the country.

Diversified thermal generation portfolio– multiple sizes and fuel types. Highly skilled and experienced human resources, exposed to state-of-the

art technologies in project execution and power generation. High brand equity among shareholders. Huge financial track record with NPAT Rs 82013 million and total

assets base is Rs 945362 million as on 31st March 2009 , with this strong balance sheet it has ability to raise low cost debt.

High credit rating that is indicative of the confidence of lenders.  

Weakness

Functional orientation hampering cross functional perspective in decision making.

Long and multi layered procurement process leading to long lead times and process delay.

Inadequate deployment of a strong knowledge management system that could assist in improving efficiency and effectiveness in all aspects of the business.

Hierarchy for decision making that affects responsiveness. Role ambiguity and dilution within different lends of the

organization.

Opportunities

Future of India is dependent on nuclear power which is in its budding stage. Since it has expertise in power generation and also huge financial strength it can leverage this opportunity.

Apart from BHEL, no company (exclude JV‟s) in country acquired acumen in power equipment manufacturing

Expand generation capacities by putting up thermal and hydro capacities; maintain the position of a dominant generating utility in the Indian Power sector.

Execute increased number of power plants that classify for Mega Power Projects status, thereby reducing the cost of the projects and power and power generated.

Forward integrate into the distribution business by intensifying its present channel in India.

Threats

After liberalization new player in the country like Tata, Reliance, Adani, Jindal etc are evolved and these are planning to go in big way.

It is predicted that the primary ingredient for thermal power generation i.e. coal will not available after 4 decades.

Joint ventures of foreign players with Indian companies to get access in power generation and power equipment manufacturing.

Stringent environmental norms in the future may add to the cost of generation.

STRAREGIES OF NTPC Maintain its position as the leader: As the largest power Generation Company in India NTPC Ltd is looking to increase its

capacity to 75000 MW by 2017. NTPC is ramping up its generation capacity and is expected to increase its market share from about 19% today to around 25% by 2017. The capacity growth of will enable it to maintain its position as the market leader. Today, the installed capacity is 30,644 MW, including 2,294 MW in joint ventures.

Adopt the new technology: NTPC Ltd is also looking to utilize other sources of power generation in the next 5 years

namely Hydel power and nuclear energy to generate electricity. And to expand their business and stay in competition they have to continuously enhance their technology. Technology enhancement is also a part of cost efficiency. That means by applying the new technologies the company can reduce the cost as well as improve the efficiency.

Resource management : The company will look to continue with their stringent recruitment and retention policy

which has provided it with the best minds in the country.

 

o Environment management

Being the leader in its trade the company will look towards fulfilling its corporate social responsibility and contributing towards the environment. Driven by its commitment for sustainable growth of power, NTPC has evolved a well defined environment management policy and sound environment practices for minimizing environmental impact arising out of setting up of power plants and preserving the natural ecology.

So as far as its strategy is concerned it is not only doing well but also creating a benchmark for those companies who are operating in this sector.