NTPC
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-2.75 (-1.55%)
NSE Volume
78.9L+
Broker Reports
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We build in some delays on execution and expect commercialization of 3.6GW in FY21. The current stock price implies 0.8x FY21 P/BV, which is at a ~40% discount to its longterm averages. Reiterate our Buy rating on the stock, with TP of INR148/s
HOLD
The acquisition will help NTPC diversify from the traditional thermal portfolio. However, in the medium term, aggressive addition in coal-based plants will keep diversification under check. Hence, we believe this will keep the investment multiples for NTPC under check. Optically, valuation at 0.7x may look attractive but the same will not appeal to investors due to skewness on the thermal front. We maintain HOLD with a TP of | 90/share.
BUY
NTPC’s results highlight the benefit of fixed-cost (F/C) recoveries and higher surcharge income. Reported PAT was up 26% YoY. We expect recoveries to continue in 4Q with improving availability at NTPC’s plants.
Commercialization is on track with 4.2GW YTD (target: 5GW). Pick-up in capitalization, along with lower F/C u/r, is expected to drive earnings CAGR of 14% over FY19-22. Maintain Buy with a target price of INR154
Commercialization is on track with 4.2GW YTD (target: 5GW). Pick-up in capitalization, along with lower F/C u/r, is expected to drive earnings CAGR of 14% over FY19-22. Maintain Buy with a target price of INR154
BUY
5GW of capitalization for FY20 appears to be on track given the recent commissioning/commercialization. NTPC’s plant availability has also improved. We believe fuel supply/availability at these plants can be ramped up (if operational issues at mines do not persist). Besides, benefit of the FY20-24 tariff regulations (GCV and O&M) are being reflected in the underlying numbers. We expect capitalization to pick up pace and drive regulated equity CAGR of 16% over FY19- 22E. Thus, capitalization should outpace capex and boost RoE. Maintain Buy with a target price of INR158/share.
BUY
Even if the late payment surcharge and related interest costs were adjusted, we believe that NTPC’s underlying numbers are strong and reflect the benefit of FY20- 24 tariff regulations. Management is keen to reduce its over-dues and while this may reduce the subsequent surcharge income/profitability, we believe it is positive as it (1) reduces the possible risk of these dues ballooning, and (2) would release cash to invest in core activities. While NTPC’s plant availability was impacted in 2QFY20, given that these plants are at pit head, fuel supply can be ramped up for the remainder of the year (if operational issues at mines do not persist). It’s ~5GW capitalization for FY20 also appears on track. We expect capitalization to pick up pace and drive regulated equity CAGR of 16% over FY19-22E. Capitalization should outpace capex and boost RoE. Our DCF-based TP is INR163/sh. Maintain Buy.
BUY
TheresultsoftheSCEDschemehavebeenencouraging.Totalsavingsof~INR3.1b were achieved for 3MFY20. According to CERC, 50% of these savings (post compensation for part load ops) would be shared with generators. Our analysis suggests that NTPC’s share stands at INR1b for 3MFY20, implying an annual INR4b benefit for the company.
BUY
We remain positive on NTPC from a medium-term perspective, given the pickup in capitalization and the decline in fuel u/r – which should drive 14% earnings CAGR over FY19-21. Maintain Buy with a DCF-based target price of INR163/sh. Over the near term though, the risks related to government divestment and the uncertainty on value accretion over the potential acquisition could be an overhang on the stock.
BUY
BUY
After generating flat EPS growth over FY16–19, NTPC is likely to post a strong 15% CAGR over FY19–21E on the back of recoupment of under recoveries and 8GW of cumulative capacity commercialisation. Maintain ‘BUY/SO’ with a target price of INR158. The stock is trading at FY20/21E P/B of 1.0/1.0x.
HOLD
Valuation & Outlook: Improved performance in terms of capacity addition and improvement in under recoveries of fixed costs will drive PAT CAGR at 11.7% over FY19- 21E. However, rising clamour on renewables as driving force for energy would limit the re rating for conventional energy companies like NTPC. We value the company at 10 P/E on FY21 EPS to arrive at a fair target of | 136.
BUY
Outlook and valuation: Over FY2018-20, the company is expected to post a CAGR of 10.5% and 10.2% in the sales and net profit respectively. At current price, the stock trades at 1.0xBV FY2019E; which implies a very low ~14-15% business ROE’s and low growth prospects for the company over a long period.
HOLD
Limited re-rating to eclipse strong capacity addition; maintain HOLD NTPC is set for strong capacity addition trajectory in FY19-21 that is expected to lead to strong growth in regulated equity base of the company and that too at a time no other player is coming up with capacity. This coupled with a strong balance sheet profile will be negated with limited upside in multiples given thermal power as a segment faces long term visibility challenges in the wake of rising tide of renewables. Hence, we continue to value the company ay 1.1x FY20E book value and continue to ascribe a fair value of | 147 per share.
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About
NTPC Ltd.
NSE: NTPC | BSE: 532555 | ISIN: INE733E01010 | Sector: Power
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