Buy NTPC; target of Rs 140: Motilal Oswal

Motilal Oswal's research report on NTPC

NTPC's 1QFY22 results highlight a steady performance - given the regulated business and aided by other income. S/A adj. PAT (excl. FC u/r) was broadly flat YoY at INR33.1b. NTPC has set a RE capacity target of 60GW by 2032. While this may seem ambitious (implying 5-5.5GW p.a. of RE additions over the next 11 years), the co. has taken steps to improve its renewable footprint. ~3GW of renewable capacities are under construction and expected to be commissioned over the next two years. Even as the co. gradually scales up its renewables journey, we expect continued capitalization for its thermal projects to drive 12% growth in regulated equity over FY21-23E.

Outlook

Maintain Buy, with DCF-based TP of INR140.