Buy NTPC: target of Rs 170: Sharekhan

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26 Aug, 2025 12:21

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Sharekhan's research report on NTPC

NTPC is well-placed to gain from steady earnings from thermal assets and RE expansion. A P/BV ratio of 1.5x for thermal projects gives valuation of ~Rs. 133,000 crore (close to current market capitalisation) and indicates negligible value for large renewable energy (RE) expansion plans. NTPC’s plan to commercialise >5GW per annum to drive an 11% CAGR in standalone regulated equity; RE capacity target (NTPC won 15% of RE bids in FY21) of 15GW/60GW by FY24E/FY32E would create significant value besides addressing ESG concerns. Potential monetisation of renewable energy and power trading subsidiaries could unlock value for NTPC and could add to shareholders’ returns in the coming years.

Outlook

We maintain a Buy on NTPC with a revised PT of Rs. 170, as valuation remains attractive at 1x its FY23E P/BV considering strong earnings visibility, likely RoE improvement and healthy dividend yield of ~4%.

For all recommendations report, click here

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