Hold NTPC; target of Rs 176: ICICI Direct

ICICI Direct's research report onNTPC

NTPC’s installed power capacity has grown, up to Q1FY18, to 40.5 GW while installed capacity was at 44419 MW. We expect installed capacity of NTPC group to increase at 7.6% CAGR in FY17-19E to 58.2 GW capacity. The plant load factor (PLF) for coal-based stations declined in Q1FY18 to 79% vs. 81.3% YoY. PLF across gas-based plants was at 24.4% vs. 26.3% YoY.

Outlook

This is despite the fact that commercialisation will grow more than 2x in FY18 over FY17. In the medium term, we believe the stock will languish in a range until more clarity emerges on where the solar tariffs make a bottom. We continue to value NTPC at 1.3x FY19E ABV and maintain fair value of Rs 176.

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