Buy NTPC ; target of Rs 139: Motilal Oswal

Motilal Oswal 's research report on NTPC

NTPC reported strong underlying numbers. This was highlighted by the high plant load factor (PLF) incentives for the co. despite lower power demand. Adj. PAT (excl. fixed charge under-recoveries) was up 23% YoY to INR33.2b. Commercialization at 5.3GW in FY20 was at an all-time high. With the addition of THDC and NEEPCO, and continued pickup in capitalization, we expect a 9% earnings CAGR over FY20-23. Maintain Buy, with DCF-based TP of INR139/sh.

Outlook

Thus, we expect overall FC u/r to remain low – albeit some machine-related u/r may occur from time to time. The stock trades attractively at a FY22 P/BV of 0.7x and div. yield of ~7%. Maintain Buy, with DCF-based target price of INR139/sh.

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