NTPC Q1 Results Review - Focus On Thermal, RE Expansion; Foray Into Nuclear Power: Axis Securities

Axis Securities Report

NTPC Ltd. reported a decent set of numbers. Consolidated net sales increased by 13%/2% YoY/QoQ beating the consensus by 5%. Ebitda stood at Rs 14,017 crore, up 9% YoY and slightly down by 1% QoQ (due to slightly higher fuel cost QoQ). It stood ahead of the consensus by 2%.

Profit after tax grew by 12% YoY but declined by 15% QoQ to Rs 5,500 crore (4% ahead of consensus). QoQ decline in PAT was mainly due to a marginal decline in Ebitda and lower other income.

Valuation and Recommendation:

We maintain our 'Buy' rating on NTPC. We value the company’s conventional thermal business at 2.5 times (from 2.3 times) price to book value on its FY26 consolidated regulated book value.

We value its renewable business business at enterprise value/Ebitda of 12 times on FY26 Ebitda. Our target price indicates a potential upside of 14% from the current market price.

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

• Lower Thermal Power Plant Plant Load Factor and Plant Availability Factor.

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