Buy NTPC; target of Rs 145: Dolat Capital

Dolat Capital's research report on NTPC

NTPC reported Q4 numbers which were better than expectations, with an adjusted PAT of Rs 38bn. The drop in PLFs at 67% in FY20, compared to 77% in FY19, reflects the trend in the industry, but is still better than the industry PLF of 56% in FY20. It has commercialized 5.2GW in FY20, while maintaining a target commercialization of 5.9GW in FY21. NTPC also plans to achieve 5.5GW of capacity addition in FY21. Its capex target is Rs 210bn in FY20.

Outlook

We adjust estimates in FY21 for the Rs 13.6bn of one-time rebate offered. There is significant valuation comfort at a P/BV of 0.8x FY22E. We maintain a Buy rating, and value the stock at 1.2xFY22EP/BV, which leads us to a TP of Rs 145.

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