Maharatna PSU giant engaged in the power and energy sector, NTPC Ltd is a hot pick of brokerages ahead of its subsidiary's big Rs 10,000 crore IPO. Brokerage StoxBox is the latest to add NTPC stock to its technical pick for October 2024. According to the brokerage, NTPC's focus on renewable energy and low-cost debt further enhances its investment appeal. The long term target is a whopping Rs 495.
NTPC Share Price:
The large-cap PSU stock is currently at Rs 428 apiece on BSE with a market cap of Rs 4,15,017.31 crore. On September 24, NTPC shares touched a new 52-week high of Rs 431.95 apiece.
NTPC's weekly and monthly gains are nearly 3% each. While in three months, the stock surged by nearly 18%. YTD, the stock is up by 79%.
NTPC Corporate Actions:
In FY24, the company delivered 77.50% dividends worth Rs 7.75 per share. In 2024 alone, the company paid up to Rs 5.5 per share. However, NTPC has delivered as high as Rs 33.8 dividend per share in 5 years, especially since its first-ever bonus issue.
NTPC delivered a bonus issue of a 1:5 ratio in March 2019.
BUY NTPC Share Price:
In its Super 7 Picks, StoxBox on NTPC said, its team "has recommended purchasing the NTPC stock at the current market price of ₹407, with a target price of ₹439 and a stop loss at ₹395."
According to StoxBox, NTPC is India's largest power producer and holds a significant share of the country's power capacity, positioning it well to benefit from increasing demand. The company plans to increase its capacity to over 130 GW by 2032 and has shown strong Q1 FY25 results, with an 11% year-over-year PAT growth to ₹4,511 crores. NTPC's focus on renewable energy and low-cost debt further enhances its investment appeal.
In the long term, NTPC has the potential to hit the Rs 495 target.
ICICI Securities in its latest report said, "NTPC Green Energy Limited (NGEL), a 100% subsidiary of NTPC, is looking to debut on exchanges as the company files its DRHP. In this note, we analyse NGEL's business, look at its valuation metrics and evaluate key concerns. The company has an operational capacity of 3.2GW, 12GW of contracted under-construction renewable energy (RE) projects and a future development pipeline at 11GW. NGEL is not only looking to set up utility-scale RE projects but also tie up with corporates and PSUs for their captive RE requirements."
NTPC Green Energy has filed its draft with Sebi and further approval is awaited.
On the valuation, ICICI Securities said, "We expect the return ratios for captive to be higher than utility-scale projects. NTPC targets 60GW of RE capacity by FY32. We estimate revenue of INR 117bn, and EBITDA of INR 95-100bn for its portfolio. EV to EBITDA remains the best valuation metric to analyse NGEL's RE portfolio. Retain BUY and TP of INR 495 on NTPC."
NTPC is India's largest power utility with a total installed capacity of 76,294 MW (including JVs). Established in 1975, NTPC is steering ahead to be India's largest integrated power company and targets to become a 130 GW firm by 2032.
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