NTPC shares, India’s largest power producer, which operates under the Ministry of Power as a Maharatna Public Sector Undertaking (PSU), climbed 3% to Rs 377 in morning trade on Monday, November 25.
As of 9:30 am on November 25, NTPC shares were trading at Rs 373 on the NSE, up 2.5% from the previous close.
To be sure, the stock extended gains for the second straight session after international brokerage Bernstein reaffirmed its outperform rating on the stock and raised its target price for the share.
Bernstein now pegs the stock’s target price at Rs 440 with an implied 20.5% upside from current levels. The brokerage pointed out strong power demand, evening shortages, and NTPC’s cost-of-debt advantage as key growth drivers.
While analysts see limited additional upside catalysts, they also downplayed downside risks, noting that the stock trades at 16x FY25 earnings and 10x EV/EBITDA, in line with global peers, according to a report by MoneyControl.
The company operates an installed capacity of 76,442.78 MW, which contributes over 25% of India’s total electricity generation despite holding only 16% of the country’s installed capacity. Its focus on higher operational efficiency, with a plant load factor (PLF) of 80.2% against the national average of 64.5%, has cemented its leadership position in the sector.
Renewable Push Boosts Prospects
NTPC’s renewable energy arm, NTPC Green Energy, recently concluded its Rs 10,000 crore initial public offering (IPO), which received strong interest from both retail and institutional investors. The IPO was subscribed 2.42 times, with retail subscriptions at 3.44 times and qualified institutional buyer (QIB) subscriptions at 3.32 times.
The company has earmarked IPO proceeds amounting to Rs 7,500 crore for repaying loans of NTPC Renewable Energy Ltd and for other corporate purposes. Market analysts believe the listing of NTPC Green Energy as a separate entity could introduce a holding company discount, which may impact NTPC’s shareholders.
Meanwhile, NTPC shares have seen volatility in recent months. Despite the uptick on Monday, the stock has dropped 12% over the past month at a time when the overall market is facing corrections.
