ICICI Direct's research report on NTPC
NTPC was able to report marginally higher growth in generation to the tune of growth of 1.4% YoY. PLFs for the coal based station increased from 77.21% in Q3FY17 from 74.65% in Q2FY17 whereas the same for gas-based stations declined from 23.85% in Q3FY17 to 23.57% in Q2FY17. Consequently, gross generation was up 1.4% in Q3FY17 to 61.40 billion units.
Outlook
Acquisition of Chhabra power plant, likely to be EPS accretive, will further enhance the asset base and regulated equity. On the other hand, structural low bond yields will also augur well for valuation multiple. Hence, we value the stock at 1.6x FY18E book value and assign a target price of Rs 200. We maintain BUY recommendation on the stock.
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