Motilal Oswal's research report on NTPC
Adjusted PAT in 2QFY26 was 4% above our estimate, mainly supported by higher-than estimated other income. EBITDA missed our estimate as weak power demand led to soft generation trends. Management highlighted its vision to take group capacity to 244GW by 2037. Medium-term capacity addition targets were guided at 9.8/9.6/10.5 GW in FY26/27/28. We maintain a cautious view on execution, especially at NGEL. Further, we believe valuations for NGEL (15% of our SOTP) have little room for re rating and may continue to face pressure. We reiterate our Neutral stance on NTPC with a TP of INR372.
Outlook
Our TP of INR372 for NTPC is based on: Value of INR207 for the standalone, coal, and other businesses at Dec’27E P/B of 2x. Value of INR19 for other subsidiaries and INR59 for JV/associates at Dec’27E P/B of 2.0x. The stake in NGEL is valued at a 25% discount to the current market price.
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