Buy NTPC, target price Rs 200: Emkay Global

Emkay Global has buy call on NTPC with a target price of Rs 200. The current market price of NTPC is Rs 171. Time period given by analyst is 1 year when NTPC price can reach defined target.

NTPC, incorporated in the year 1975, is a Large Cap company (having a market cap of Rs 166006.92 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 30-09-2022, the company has reported a Consolidated Total Income of Rs 44681.50 Crore, up 2.57 % from last quarter Total Income of Rs 43560.72 Crore and up 35.01 % from last year same quarter Total Income of Rs 33095.67 Crore. Company has reported net profit after tax of Rs 3563.59 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 Parakh & Co. as its auditors. As on 30-06-2022, the company has a total of 970 Crore shares outstanding.

Investment Rationale
Given the huge underutilized coal capacity (current PLF in the 75-80% range, while NTPC units have achieved 92-93% PLF earlier, on annual basis), the brokerage believes any strong uptick in demand in the medium term will benefit NTPC. Further it has maintained its Dec-23 TP of Rs200/share for NTPC, which currently trades at 1.1x with ~12% RoE on FY25E.

Promoter/FII Holdings
Promoters held 51.1 per cent stake in the company as of 30-Jun-2022, while FIIs owned 14.0 per cent, DIIs 31.32 per cent.