| Photo Credit:
Anindito Mukherjee/Bloomberg
Target: ₹400
CMP: ₹338.90
NTPC’s PAT stood at ₹6,108 crore, up 11 per cent y-o-y but down 23 per cent q-o-q, beating our and consensus estimates by 13 per cent. PAT adjusted for regulatory deferral movement stood at ₹4,101 crore. However, the consolidated revenue and EBITDA missed our and consensus estimates, led by lower power generation.
The company has a capex plan of about ₹₹2.65 lakh crore at the group level over FY26-28 (₹87,661 crore at the standalone level). This will drive the growth in the regulated equity. Due to its strong vendor network and management, it expects lower execution risk in setting up thermal projects. The captive coal production target for FY26 is 45 MT, and it aims to produce 56 MT in FY27 and 60 MT by FY28.
We value NTPC using SoTP with the thermal business at 2.1x P/BV on FY27 consolidated regulated equity, RE business at CMP (NGEL) after accounting for the 90 per cent stake and considering a 25 per cent Holdco discount, PSP optionality at ₹23/share, CWIP and cash at 1x P/BV of FY25. We maintain Buy rating with unchanged target price of ₹400.
Key risks to our estimates and target price: Delays in commissioning of the thermal and RE capacity; financial position of Discom. NTPC’s trade receivables are dependent on the timely payment from state Discoms; and lower Thermal Power Plant PLF and PAF.
Published on July 30, 2025
