Motilal Oswal's research report on NTPC
We reiterate our Neutral stance on NTPC with a TP of INR380. After a 17% correction in the share price over the last 12M, valuations at 11x FY27 P/E appear relatively reasonable, even as the long-term project pipeline continues to build up, supported by an expanding footprint in nuclear, PSP, renewables, and green chemicals. However, we maintain a cautious view on execution, especially at NGEL, even though management has guided that 87/80% of capacity slated to be commissioned in FY26/27 already has PPAs tied up. Further, we believe valuations for NGEL (15% of our SOTP) have little room for re-rating and may continue to face pressure. Lastly, we believe the FY27E dividend yield of 2.9% remains modest and lower than peers such as PWGR (FY27: 3.4%).
Outlook
Our TP of INR380 for NTPC is based on: Value of INR219 for the standalone, coal, and other businesses at Mar’27E P/B of 2.2x. Value of INR19 for other subsidiaries and INR53 for JV/associates at Mar’27E P/B of 2.0x.
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