Sell NTPC; target of Rs 146: Centrum

We downgrade the stock to Sell with a revised TP of Rs146. The recent stock rally has been sharp, and although our TP extends optimism on higher than Management-guided regulated equity base and capacity addition, we believe that potent risks of slippages in capacity addition noting the low capex spends for its upcoming plants and adverse CERC tariff orders for FY15-19 control period which imply an under-recovery (not factored-in) in energy charges are completely being ignored by the street. Additionally, our channel checks reveal that litigation with CERC over 2014 tariff regulations is on a slow track, and respite remains elusive. Earnings from captive coal mining which will commence over next 2-3 years will be key triggers for the stock to outperform.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.