Buy NTPC; target of Rs 358: Geojit Financial Services

Geojit Financial Services research report on NTPC

Consolidated revenue from operations grew 5.2% YoY to Rs. 45,053cr in Q3FY25, driven by the strong performance of the generation segment, which accounted for 96.7% of total revenue and registered a growth of 5.6% YoY. NTPC’s gross power generation rose to 91.25 billion units (BU) in Q3FY25 from 89.46 BU in Q3FY24, reflecting a steady growth in electricity production. NTPC’s coal production saw a significant rise of 35.7%, reaching 10.98 million metric tonnes (MMT), as against 8.09 MMT in the year-ago period. EBITDA surged 17.3% YoY to Rs. 14,212cr, driven by a significant 21.6% YoY reduction in other expenses. As a result, NTPC’s EBITDA margin improved 320bps YoY to 31.5% in Q3FY25, indicating improved operational efficiency. Consolidated PAT declined a slight 0.8%, settling at Rs. 5,170cr, primarily impacted by elevated tax liabilities.

Outlook

With consistent growth and strategic focus on capacity expansion, NTPC is poised for long-term sustainable growth. Therefore, we upgrade our rating on the stock to BUY based on 9.2x FY27E EV/EBITDA with a rolled forward target price of Rs. 358.