Buy NTPC, target price Rs 205 : JM Financial

JM Financial has buy call on NTPC with a target price of Rs 205. The current market price of NTPC is Rs 176.4 .

NTPC, incorporated in the year 1975, is a Large Cap company (having a market cap of Rs 168043.22 Crore) operating in Power sector.

NTPC key Products/Revenue Segments include Generation Of Electricity, Coal, Other Operating Revenue, Consultancy Income and Lease Rentals for the year ending 31-Mar-2022.

Financials
For the quarter ended 31-03-2023, the company has reported a Consolidated Total Income of Rs 44745.74 Crore, down -.54 % from last quarter Total Income of Rs 44989.21 Crore and up 18.61 % from last year same quarter Total Income of Rs 37724.42 Crore. Company has reported net profit after tax of Rs 4572.47 Crore in latest quarter.

The company’s top management includes Mr.Gurdeep Singh, Mr.Vidyadhar Vaishampayan, Mr.Jitendra Jayantilal Tanna, Ms.Sangitha Varier, Mr.Piyush Singh, Mr.Jaikumar Srinivasan, Mr.Ashish Upadhyaya, Mr.Ujjwal Kanti Bhattachrya, Mr.Chandan Kumar Mondol, Mr.V Ramesh Babu, Mr.Dillip Kumar Patel, Mr.Vivek Gupta. Company has Varma & Varma as its auditors. As on 31-03-2023, the company has a total of 970 Crore shares outstanding.

Investment Rationale
The brokerage finds NTPC best placed for success in India’s energy transition, similar to its successful global peers (Green & Grey: Together We Win), and it is poised for leadership in India’s renewables market (target 60GW+ renewables by FY32) given i) visible pipeline of projects already won by it, ii) competitive advantage on debt cost at around 6% (vs. 8% for other industry players) and iii) benefit of scale (20GW of renewable capacity) under planning and development.

JM Financial values the company’s thermal business at 1.4x FY25E Regulated Equity and assign 9x multiple to FY25E EBITDA of its RE business.

Promoter/FII Holdings
Promoters held 51.1 per cent stake in the company as of 31-Mar-2023, while FIIs owned 15.61 per cent, DIIs 30.27 per cent.