Moneycontrol
Feb 15, 2017 03:03 PM IST | Source: Moneycontrol.com

Hold NTPC; target of Rs 165: Centrum

Centrum recommended hold rating on NTPC with a target price of Rs 165 in its research report dated February 08, 2017.

 
 
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Centrum's research report on NTPC


We reiterate that our TP extends optimism on higher than Management-guided regulated equity base and capacity addition, but highlight potent risks of slippages in capacity addition. Also, our channel checks reveal that litigation with CERC over 2014 tariff regulations is on a slow track, and respite remains elusive. Earnings from captive coal mining which will commence over next 2 years in a meaningful manner will be key triggers for the stock to outperform.


Outlook


We retain Hold on NTPC with a revised TP of Rs 165 (earlier TP of Rs146) as we roll-over to Mar’19E. Core earnings appear weak despite lower tax rate and sequential higher other income with our inference of core RoE at 5.2% vs 5.5% in Q2FY17. Adjusted for lumpy prior period earnings, adjusted EBITDA/PAT per unit on a sequential basis reflect de-growth.

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