NTPC - Well-Placed To Benefit From Re-Transition: Axis Securities Initiates Coverage With A 'Buy' Rating

Axis Securities Report

We initiate coverage on NTPC Ltd. with a 'Buy' rating and target price of Rs 345, implying potential upside of 13% from the current market price.

NTPC is the largest power producer forming 17% of India’s installed capacity and 25% of the total generation in FY23. The broad-based economic recovery and infrastructure growth have driven an increase in peak demand, reaching new highs in FY24.

This surge in demand, particularly during non-solar hours, has resulted in a resurgence of peak deficits, once again bringing the sector into the spotlight. NTPC's substantial portfolio in conventional power, with a firm cost-plus business model, positions it well in a growing peak power cycle. This structure contributes to stable cash flows and will facilitate growth led by renewable energy.

The CEA projects an incremental coal-based power capacity of 47 giga watt by FY32, in which NTPC will capture the major chunk with its brownfield power projects.

The company has ~10 GW of thermal capacity under construction which is expected to get commissioned by FY26. It will be awarding thermal capacity of 11.2 GW, which will be tendered over the next 12 months.

NTPC has an ambitious target of 60 GW of renewable capacity by FY32 from the current 3.3 GW. Presently, ~7.3 GW of RE projects are under construction and it has secured tenders and bilateral tie-ups for another 10 GW of RE capacity, creating a visible pipeline of more than 20 GW in the near term.

It has also planned various new ventures to diversify from core operations into various green initiatives, such as green hydrogen, energy storage, nuclear power, green mobility and RE-RTC power which provides further growth optionality and rerating potential.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.