A

PRESENTATION ON ANALYSIS AND

STRATEGIES OF
NTPC 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
 INTRODUCTION TO NTPC:

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).
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.