Sharekhan has given Buy recommendation for NTPC with a target price of Rs. 170 in its research report issued on May 20, 2022

Sharekhan’s research report on NTPC

Q4FY22 adjusted PAT of Rs. 4,560 crore (up 19% y-o-y) was above our estimate led by fuel cost over-recovery of Rs. 238 crore, RoE contribution from project commercialized in last one year and a lower tax rate. Management guided to commercialise 5GW/6GW of capacities in FY3E/FY24E and expects regulated equity base to register double digit CAGR over few years. This along with conversion of CWIP to commercial assets provide strong earnings growth visibility over FY23E-24E. NTPC indicated to monetize some renewable energy assets in FY23 and also have plan of IPO or induction of strategic investors to unlock value. Value unlocking and strong operating cash flow (up 31% y-o-y to Rs. 35,388 crore in FY22) could further improve dividend payout.


We maintain a Buy on NTPC with an unchanged PT of Rs. 170, as it is attractively valued at 1x its FY24E P/BV despite strong earnings visibility, focus to ramp-up RE portfolio, decent RoE of 14% and dividend yield of ~5%.

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