1 Maharatna & 1 Navratna Stocks Gets 'Buy' Rating By Major Brokerage Firms, Details Inside

Two leading brokerage firms, Emkay Global & ICICI Securities is bullish on two Power & Oil sector PSUs, Maharatna & Navratna stocks. Brokerage suggests buying the stock of NTPC Ltd & Coal India Ltd. According to the brokerages, the two stocks have the potential to give strong returns in the upcoming 12 months. Check out the details and what brokerage has said about the stocks below.

NTPC Limited

NPTC Ltd today closed at Rs 143.70/share, after a surge of 2.17%. It was opened at Rs 141/share. The share price of NTPC has given decent returns on long-term investments, however, in short term, particularly in the last 3months, it has given negative returns. In last 1 & 3 months, it has given negative return of 8.85% & 5.85%, respectively. In the past 1 year, it has delivered a massive 21.88% positive returns. In the past 3 & 5 years, it has given 10.46% and 8% positive returns, respectively.

The stock's 52-week low was recorded on 21st August 2011 at Rs 111.95/share, and 52 week high was recorded on 19th April 2022 at Rs 166.35/share. The PE ratio of the stock is 8.35, while the sector PE is 12.07. The PB ratio is 1.01. Its face value is Rs 10. The ROE is 12.31%. The EPS-TTM is Rs 17.20. It is a large Cap Maharatna company with a market capitalisation of Rs 1,39,147 crore. It is a power & energy sector stock.

According to the brokerage firm Emkay Global Research, if the investors buy the stock of NTPC at the Current Market price of Rs 143.70/share, considering the target price of Rs 188/share, estimated by the brokerage firm, investors can witness potential gains of 31%.

Brokerage comments on NTPC Ltd

Emkay Global Research said, "NTPC remains a play on large fossil assets (with robust cash flows), along with strong growth in the RE space. The strong power demand is expected to continue in the medium term, given the strong manufacturing push by the government. NTPC's stock provides ~5% dividend yield. It is expected to add 3-4GW annually for the next few years (coal and RE combined). It is currently trading at ~0.94x/~0.9x PB on FY24E/FY25E, with an RoE of ~12% and an earnings CAGR of 6-7%. The company is planning to float an IPO or invite a strategic investor for its RE portfolio in FY23/24. Our SoTP value stands at Rs188/share (Rs180 earlier) after factoring in DPS in our target. Risks include a significant slowdown in power demand and any delay in project completion."

Coal India Limited

The Current Market Price (CMP) of Coal India is Rs 189.80/share, after a surge of 1.88% on NSE. It was opened at Rs 187.05/share. The stock on investments has given mixed returns. In the last 1 week, it has delivered a positive return of 3.3% & 29.78% in the last 1 year. In the last 3 and 5 years, its share price slid nearly 18.55% and 26.66%, respectively.

The 52-week low of the stock is Rs 132.75/share and the 52-week high is Rs 209/share, respectively. The PE ratio of the stock is 6.74, while the sector PE ratio is 6.17. The PB ratio is 2.67. Its face value is Rs 10. The ROE is 40.23%. EPS-TTM is Rs 28.17. It is a large-cap Navratna company with a market capitalisation of Rs 116,968 crore. It is an mining/mineral/coal sector stock.
Investors buying the stocks of Coal India at the Current Market Price could lead to a 36% potential gain in 12 months considering the estimated target price of Rs 258/share by the brokerage firm, ICICI securities.

Brokerage's Comments on Coal India

According to the brokerage, "Coal India Ltd continues to clock strong operational numbers, buoyed by high domestic coal demand and continued elevated international coal prices. In Q1FY23, production / offtake was 159.8mnte / 177.6mnte, up 28.9%/10.7% YoY, respectively. Production has increased by a record 35.8mnte YoY in Q1FY23, higher than the YoY increase in the entire FY22 (26.4mnte)."

Brokerage on valuation said, "We maintain our BUY rating and our DCF-based target price of Rs258 on the stock. Coal India Ltd is currently trading at 5.5x P/E and 2.5x EV/EBITDA on FY24E basis with 35.6% RoE. We expect dividend payout to remain high, leading to 10-12% yield at CMP, despite heavy capex."

 

Stocks-CMP, Target Price & Potential Gains

Stocks	CMP	Potential Gains	Target Price
NTPC	Rs 143.70	31.00%	Rs 188
Coal India	Rs 189.8	36.00%	Rs 258

Disclaimer

The stocks have been picked from the brokerage reports. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.