SP Tulsian of sptulsian.com told CNBC-TV18, "I have a negative view on NTPC. Yesterday two crore shares have been delivered in the market taking combined delivery on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) – 57-58 percent, actually that is not the story but the position has shifted into the Future and Options (F&O). Yesterday about 26-28 lakh shares got rolled over but there has been a long position created of 1 crore 20 lakh shares in NSE in March series and this sign is a really bad; whenever you see this type of things coming in - actually we have seen this kind of things coming in NHPC.”
“The downgrades will start coming in because from the availability to the efficiency factor, it goes against the company, we will be seeing the return on capital of the company falling to 16-17 percent. If you take their financial performance for FY14 then they have poor three quarter earnings. If I take earnings per share (EPS) of close to about 13 and even if there is a downgrade of 10 percent in the earning, it will fall to a level of Rs 11 for FY15 maybe sub-10 for FY16. So, I do not think that this will go well and the kind of delivery based selling which we have seen yesterday of 2 crore shares is scary,” he added.
“If we keep seeing this kind of things coming in, the stock still has the downward prospects. I am taking a short-term target of Rs 110 for the stock but on the longer-term I won’t be surprise to see the stock settling closer to about Rs 100 or so.”
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