NTPC Shares Hit All-Time High As Brokearges Impressed By Strong Results, Expansion Plans

NTPC shares shot up to an all-time high on Tuesday after the company reported strong Q1 results and rolled out ambitious expansion plans, prompting brokerages to maintain their positive stance on the company.

What Happened: NTPC's net profit grew 12.20% year on year to ₹5,506.07 crore in the quarter. Its quarterly revenue from operations surged 12.64% to ₹48,520.57 crore.

NTPC's consolidated installed capacity increased to 76,048 megawatts from 73,024 megawatts in the previous year. The company generated a gross of 97.86 billion units in the quarter compared with 88.546 billion units in the previous year.

In the earnings call, the management said it plans to add capacity up to 1.30 lakh megawatts in 2032, with 60,000 megawatts earmarked as renewable energy.

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Brokerage Views: Jefferies maintained a "buy" call on the stock and increased its target price to ₹485, saying Q1 profit was 11% above expectations.

The research firm said the company's execution pace is expected to pick up as earnings visibility improves with thermal with 9600 megawatts in capacity under construction and 15,200 megawatts set to be awarded.

The brokerage noted that the firm’s regulated return on equity was at 15.5% for FY25-29 and a re-rating for the stock will continue as execution increases. Pilot initiatives on green hydrogen renewable energy capacity addition are other re-rating drivers, the research firm said.

Antique also stayed with a "buy" call on the stock with a target price of ₹458. The brokerage expects return on equity expansion from 11% in FY24 to 13% by FY27 as the company’s commissioning capacity and capital works in progress reduces.

The brokerage highlighted that NTPC had 21,000 megawatts of capacity under construction with 54% being hydro and renewables to be commissioned by FY27. It said this is expected to provide earnings per share growth of 14% over FY24-27. The brokerage also added that further catalysts for the stock will be NTPC’s green IPO in FY25 and capacity addition.

Kotak Institutional Equities held a “sell” call while hiking the target price to ₹290 as it says the current market price captures company’s growth plans while not considering the lower-than-expected returns from renewable assets.

Price Action: Shares of NTPC rose 4.77% to hit all-time high of ₹412.70 on Tuesday morning.

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