Broking houses Motilal Oswal has reiterated buy rating on NTPC as the rapid commissioning of the projects has improved visibility of capitalization.
The company’s capitalization will pick up pace after a lull period of 3-4 years. It has already commissioned 3.7GW, and planning to commission additional 2.6GW before the end of FY18. Its JV company is targeting to capitalize 250MW and commission 660MW project.
The acquisition of 1GW Chhabra thermal power plant in Rajasthan is pending for the transfer of coal linkage, which is expected soon and the proposed acquisition of SJVN will improve the share of renewable energy in the mix, said Motilal Oswal.
The broking firm expect regulated equity CAGR of 20 percent over FY17-20, driven by acceleration in project capitalization, while PAT will grow slower, but still accelerate at 11 percent CAGR over FY17-20E.
The firm expects the stock to get re-rated and it valued the stock at Rs 198 per share based on discounted cash flow.
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