Shares of NTPC zoomed to an all-time high, as most analysts gave thumbs-up to its quarterly performance of the PSU power major. NTPC hit an all-time high of ₹412.60 on the BSE on Tuesday and closed 3.3 per cent higher at ₹406.90 after the State-owned power generator reported higher quarterly results.
NTPC’s consolidated net sales increased 13 per cent/2 per cent y-o-y/q-o-q beating the consensus by 5 per cent, said Axis Securities. EBITDA stood at ₹14,017 crore, up 9 per cent y-o-y and down 1 per cent q-o-q (due to slightly higher fuel cost). It stood ahead of the consensus by 2 per cent. PAT grew 12 per cent y-o-y but declined 15 per cent q-o-q to ₹5,500 crore (4 per cent ahead of consensus). Q-o-q decline in PAT was mainly due to a marginal decline in EBITDA and lower other income, the domestic brokerage said.
NTPC has ₹7 lakh crore of capex requirement for the 130 GW+ capacity addition by 2032. This will drive double-digit growth in regulated equity in the near term. It expects lower execution risk in setting up thermal projects due to its strong vendor network and management. “The coal production target for FY25 is 40 mtpa (35 mtpa in FY24) and it is targeting to produce 25 per cent of coal requirement from its own mines by FY30,” Axis Securiteis said while hiking the price target to ₹450 from the earlier ₹420.
Parth Shah, Research Analyst, StoxBox, said that with economic activities booming in the country and increasing consumption patterns, the company’s revenue from operations showed a positive growth from the earlier period. “Complementing such a situation, the reducing fuel costs aided the company to report a better operational profit during the quarter, thereby enhancing the overall margins,” he added.
Bullish on the stock
According to ICICI Securities, which is the most bullish on NTPC with a price target of ₹495, said firm capacity addition has been low in the past five years; thus, to meet peak demand, India has to fall back on thermal capacity, and NTPC has the best-performing thermal capacity in India.
“Thus, we believe, as power demand continues to grow at 6 per cent per year, India may need to add more thermal capacity to meet the medium-term demand before storage solutions become economically viable. NTPC is likely to add to this thermal capacity,” it added.
“We revise our rating to Buy from Accumulate and raise our TP to ₹474 from ₹400 on better visibility on regulated returns and traction in RE (renewable energy) initiatives based on 2.6x (from 2.0) P/B regulated equity FY27E P/B, 13x (unchanged) EV/EBITDA FY27E for renewable assets and 1.0x (unchanged) in cash and investment,” said Elara Capital.
Among the global brokeages, Jefferies was the most bullish with a target price of ₹485 and CLSA expecting a target of ₹441. However, HSBC, with Hold rating and a target price of ₹355, and BofA Securities, with underperformer and a target price of ₹271, were bearish.