Buy NTPC; target of Rs 460: Sharekhan

Sharekhan's research report on NTPC

Q1FY25 standalone PAT was up 11% y-o-y to Rs. 4,511 crore with the regulated equity base growing 13% y-o-y to Rs. 88,600 crore. Consolidated PAT of Rs. 5,506 crore was up 12% y-o-y. NTPC plans to tender 15.2 GW of thermal capacities in the next 2-3 years apart from under-construction thermal capacities of 9.5GW. Renewable energy capacity target remains strong at 20 GW by FY26 and 60GW by FY32. We believe that addition of thermal power capacities would drive regulated equity base and provides earnings growth visibility. Moreover, focus on ramping up of Renewable energy portfolio and its impending IPO would be key re-rating catalyst over the medium to long term.

Outlook

We maintain a Buy on NTPC with a revised PT of Rs. 460. Valuation of 2.2x FY26E P/BV are reasonable given strong long-term growth prospects, and the stock offers a decent dividend yield as well.