22.50% Dividends; Maharatna NTPC Hits New 52-Week High Ahead Of Ex-Dividend; More Steam To Buy?

Holding a Maharatna status, the government-backed NTPC is engaged in generation of electricity and other activities. NTPC share price will be in focus this week for turning ex-dividend on February 6 for a payout to the tune of 22.5%. This will be NTPC's second interim dividend. On Monday, the stock touched a new 52-week ahead of record date.

NTPC Share Price:

At the time of writing, NTPC shares traded at Rs 337.65 apiece, up by 1.6% on BSE with a market cap of Rs 3,27,795.80 crore on Monday. The stock was trading near its fresh 52-week high which it recorded in the early trade.

NTPC Dividend:

The company's board of directors have decided to pay a second interim dividend at the rate of 22.50% amounting to Rs 2.25 per share on the face value of Rs 10 each for the financial year 2023-24. The date of payment/dispatch of dividend shall be 22 February 2024.

For the second interim dividend, the company fixed Tuesday, February 6, 2024 as the "RECORD DATE' for the purpose of ascertaining the eligibility of the shareholders for payment of the second interim dividend, if declared by the Board.

Earlier, NTPC paid its first interim dividend of 22.5% amounting to Rs 2.25 per share for FY24. In the financial year 2022-23, the company paid dividends up to 72.50% amounting to Rs 7.25 per share.

On the current market price, the dividend yield is at 2.18%.

NTPC Outlook:

As per JM Financial, in 3QFY24, NTPC Ltd (NTPC) reported net sales of INR 428bn (-4% YoY,-8% JMFe, -8% consensus), EBITDA of INR 114bn (-22%YoY, -12% JMFe), and adj. PAT of INR 52bn (+9% YoY, +4% JMFe, -2% consensus) during 3QFY24. There was a significant improvement in operations; gross generation/ plant load factor (PLF) increased to 89.5 BU (13.8% YoY)/ 76% (v/s 69% 3QFY23) which was overshadowed by the change in accounting method that has led to inflated sales during 3QFY23 (one-time adjustment of INR 30.97bn due to 'Net movement in regulatory deferral account balances (net of taxes) relating to reimbursement of ash transportation cost).

Further, JM's note said, "Given the continued growth momentum in renewables and renewed thrust on margin-accretive thermal power, we revise our FY27 and beyond estimates upwards factoring the extended visibility of thermal power. We value the company's thermal business at 2x FY26E Regulated Equity and assign a 12x multiple to the FY26E EBITDA of its RE business. We maintain our BUY rating with a revised TP of INR 368."

Meanwhile, Elara Capital said, NTPC seems well placed, given it is the leading thermal utility with accelerated coal-based expansion targets. It has several opportunities to invest in brownfield expansion, where the private sector is reluctant to invest."

Elara's note further said, "The stock is trading at 1.8x FY26E P/B, which seems attractive. We revise NTPC to Accumulate from Buy as the stock has run up 33% from September 2024 levels. We raise out TP to INR 341 on better visibility on regulated returns and traction in RE initiatives, based on 2.0x regulated equity FY26E P/B, 1.2x regulated equity in CWIP and 1.0x cash and investments.

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