Buy NTPC; target of Rs 210: Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal's research report on NTPC

NTPC’s standalone (S/A) 3QFY18 adj. PAT declined ~5% YoY to INR21.3b, despite ~19% YoY increase in regulated equity to INR505b. It missed our estimate due to INR5.4b under-recovery of fixed cost. Average plant availability at 83% dipped below the normative 85% due to shortage of coal at Kudgi, Solapur and Mouda. Reported PAT at INR23.6b was impacted by INR2.4b in accelerated leave encashment, offset by a gain of INR5.6b on reversal of prior-period tax.

Outlook

We expect consol. PAT to grow at a CAGR of ~13% over FY18-20E and RoE to improve by ~110bp, despite factoring in a cut in regulated RoE in the FY20 tariff period. We roll forward our TP to FY20E. Our DCF-based TP is revised to INR210/share (from INR211/share earlier). Maintain Buy.For all recommendations report, click here

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