Mahartna PSU energy company, NTPC Ltd, witnessed selling pressure on Monday, January 27 after its Q3 results due to intense bearish market sentiment. Surprisingly, NTPC shares fared better compared to other PSUs with a mild downside. This brings in a buy-on-dips opportunity in NTPC as brokerages like Axis Securities and Elara Capital have suggested BUY. There is potential for whopping 47% upside in NTPC ahead.
NTPC Share Price:
At the time of writing, NTPC stock traded at Rs 322.75 apiece, down by 0.3% on BSE with a market cap of Rs 3,12,959.90 crore. The stock recovered early losses that were due to hitting an intraday low of Rs 314.50 apiece. The stock's 52-week high and low are at Rs 448.30 apiece and Rs 296.85 apiece respectively.
So far, NTPC has carried hefty dividend rewards and only one bonus issue since 2000.
Bonus Issue: The PSU carried a 1:5 first-ever bonus issue in March 2019. Meaning, NTPC rewarded investors with 1 free share against 5 existing shares.
Dividends: Since February 2005, the company has delivered about 43 dividends, as per Trendlyne data. In the last 12 months, the company paid about Rs 8 per share dividend. Currently, it has a dividend yield of 2.48%.
NTPC Q3 Results:
In Q3FY25, the company posted a net profit of Rs 4,711.4 crore, up by 3.1% from Rs 4,571.9 crore in the same quarter a year ago. While revenue jumped by 4.8% to Rs 41,352.3 crore in Q3 of the current fiscal, as against Rs 39,455 crore in Q3FY24. EBITDA witnessed strong growth of 20.3% YoY, while margins expanded to 28.9%.
NTPC Interim Dividend:
NTPC's board on January 25th, approved the payment of second interim dividend at the rate of 25% or Rs 2.50 per share which has a face value of Rs 10 each for FY25.
The power generating company fixed Friday,-31 January 2025 as the "RECORD DATE" for the purpose of asce1taining the eligibility of the shareholders for payment of the second interim dividend.
The date of payment/ dispatch of dividend warrant shall be 18 February 2025.
Buy NTPC Stock?
Elara Capital in its note said, "NTPC is a play on energy transition as well as energy security. We believe its regulated equity base will increase, led by 25GW addition of thermal capacity. An expanding RE pipeline and foray into new business verticals of green hydrogen and pumped hydro storage should drive growth. The stock is trading at 1.7x FY27E P/B, which is attractive. We maintain Buy with TP pared to INR 462 (from INR 497) on better visibility on regulated returns and traction in RE initiatives based on 3x (unchanged) P/B regulated equity FY27E, 1.0x (unchanged) in cash and investment. We pare our TP to INR 462 from INR 497 on account of lower valuation from subsidiary company, NTPC Renewable due to recent correction in the stock price."
As per Axis Securities, NTPC requires Rs 7 Lc Cr of Capex for the 130 GW+ capacity addition by 2032. This will drive growth in regulated equity. Due to its strong vendor network and management, it expects lower execution risk in setting up thermal projects. The coal production target for FY25 is 40 MTPA, and it aims to produce 67 MTPA by FY29.
On the valuation, Axis Securities said, "We value NTPC using SoTP with the thermal business at 2.0x (from 2.4x) P/BV on FY27 consolidated regulated equity, RE business at CMP (NEGL) after accounting for the 90% stake and considering a 25% Holdco discount, PSP optionality at Rs 23/share, CWIP and cash at 1x P/BV of FY25." The new target price is Rs 390 on NTPC.
About NTPC:
NTPC is India's largest energy conglomerate with roots planted way back in 1975 to accelerate power development in India. Since then it has established itself as the dominant power major with presence in the entire value chain of the power generation business. From fossil fuels it has forayed into generating electricity via hydro, nuclear and renewable energy sources. This foray will play a major role in lowering its carbon footprint by reducing green house gas emissions. To strengthen its core business, the corporation has diversified into the fields of consultancy, power trading, training of power professionals, rural electrification, ash utilisation and coal mining as well.
Click it and Unblock the Notifications
Sign in with Google