Buy NTPC; target of Rs 380: Sharekhan

Sharekhan's research report on NTPC

Results were weak on sluggish power demand and slow capacity additions. Q3FY25 adjusted standalone PAT was up 6% y-o-y to Rs. 4,618 crore with the regulated equity base growing 7% y-o-y to Rs. 90,289 crore. Consolidated adj. PAT of Rs. 4,964 crore was up 1% y-o-y with consolidated regulated equity base growing 5% y-o-y to Rs. 1,05,854 crore. NTPC plans to tender 7.2 GW of thermal capacities in the next 2-3 years apart from under-construction thermal capacities of 17.6 GW. Renewable energy capacity target remains strong of 3 GW/5 GW/8 GW addition in FY25/26/27.

Outlook

We maintain a Buy on NTPC with a revised PT of Rs. 380 (from Rs. 460 earlier). Valuation of 1.7x/1.6x FY26E/FY27E P/BV are reasonable given strong long-term growth prospects, and the stock offers a decent dividend yield as well.

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