Buy NTPC; target of Rs 191: Edelweiss

Edelweiss' research report onNTPC

Q4FY17 was marked by good operational performance. NTPC registered healthy PLFs in all the 3 fuel categories i.e., coal PLF of 81% (flattish YoY), gas PLF of 24% (up 18% YoY) and hydro PLF of 13.5% (up 13% YoY). Power off take at 60BUs in Q4FY17 (58BUs in Q4FY16) was up 3% YoY.

Outlook

We believe step-up in commissioning activity will drive earnings growth over FY18-19 (18%), even as clarity on impact of potential heat loss after the coal unloading stage is a key monitorable. At CMP, the stock trades at 1.3x and 1.2x FY18E and FY19E P/BV, respectively. We maintain ‘BUY/SP’ with SOTP-based TP of INR 191.

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