Neutral NTPC; target of Rs 370: Motilal Oswal

Motilal Oswal recommended Neutral rating on NTPC with a target price of Rs 370 in its research report dated November 27, 2025.

Broker Research

November 28, 2025 / 11:16 IST

Neutral

26 Aug, 2025 12:21

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Motilal Oswal's research report on NTPC

NTPC is reportedly planning a large coal-to-synthetic natural gas (SNG) facility with a capacity of 5-10m tonnes per year (link). Producing SNG from its own coal would lower dependence on imported LNG, which is prone to price and supply volatility. NTPC currently operates 4GW of gas-based capacity (part of India’s 20.1GW installed gas capacity, ~5% of NTPC Group installed capacity), and having its own SNG supply would help it run gas plants more flexibly, especially during peak demand, improving grid stability. Coal gasification leverages India’s abundant coal reserves and aligns with government incentives supporting the technology. NTPC estimates SNG production costs at USD 10–12/mmBtu (link), which it believes is competitive with imported LNG (risks from emerging global gas glut). Surplus SNG could also be sold commercially, given its applications in sectors such as petrochemicals and fertilizers.

Outlook

We retain our cautious stance on NTPC. While we like its long-term story, we believe execution may continue to trail investor expectations, especially at NTPC GREEN Energy Ltd (NGEL). Further, we believe valuations for NGEL (15% of our SoTP) have little room for rerating and may continue to face pressure. We reiterate our Neutral rating with a TP of INR370 (valued on an SoTP basis).

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