ICICI Direct recommended hold rating on NTPC with a target price of Rs 122 in its research report dated August 13, 2019.
ICICI Direct's research report on NTPC
NTPC reported its Q1FY20 operational performance in line with estimates. Higher-than-expected tariff for the quarter led to revenue beat as gross generation and energy sold were in line. Higher than other income was balanced by higher depreciation charge, which led PAT to come in line with our estimates. Reported revenues came in at Rs 24,192.6 crore vs. estimate of Rs 22,590.1 crore. The key reason for the beat was higher-than-expected tariff during Q1FY20 at Rs 3.63/kWHR vs. expectations of Rs 3.55/kWHR. EBITDA came in at Rs 6,452.4 crore vs. our estimate of Rs 6,059.1 crore, mainly on account of higher revenues. Reported PAT came in at Rs 2,602.8 crore vs. our estimate of Rs 2,590.5 crore, on account of higher other income the same which was dented by higher than expected depreciation charges.
We value the company at 9x P/E on FY21 EPS to arrive at a target price of Rs 122.
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