ICICI Securities Suggests Buy This Energy Stock For 30% Returns, Strong Q4 Results

Stock Outlook

The CMP of the stock as on 24th May 2022 after closing is Rs 146.90. Today, the share price of the stocks declined by 2.10%. It was opened at Rs 150.15. As per the given Target price and the CMP, the stock can expect 29.34%, almost 30% returns in 1 year. In the last 1 year, the stocks gained close to 30%, however, it also witnessed ups-downs whole during the duration. In the last 1 week, the stock didn't perform well. It touched the level of 52 week low at Rs 107.80 on 31st May 2021 and 52 week high at Rs 166.35 on 19th April 2022.

 

Q4FY22 Results

According to the brokerage, "NTPC reported operationally decent Q4FY22 results. In terms of operational performance, generation and energy sold were higher than our estimates led by new capacity addition and better YoY PLFs (higher than national average). Reported revenues came in at Rs 32905 crore vs. our estimate of Rs 27428.8 crore. The key reason was NTPC reporting higher-than-expected generation and higher-than-expected power trading revenues. Generation during Q4FY22 was at 79.9 billion units vs. expectations of 76.6. billion units, growth of 2.3% YoY. EBITDA came in at Rs 10120.6. Reported PAT came in at Rs 5621.9 crore led by better EBITDA and lower effective tax."

Buy for a target price of Rs 190

ICICI Securities has said, "With strong focus on alternate energy spectrum, we believe NTPC may be able to break away from the underperformance of the last decade and be in for a rerating. We maintain our BUY rating on the stock. We value NTPC at Rs 190 i.e. 1.3x FY24E book value."

Key triggers for future price performance

NTPC has ~1850 MW that has been commercialised while ~3500 MW will come under commissioning in the next 18 months. It is expected to reach a capacity of 10GW by 2026. The company expects to spend ~40% of total capex planned for FY22, FY23 on renewable projects.

About the Company - NTPC Ltd

NTPC Ltd or National Thermal Power Corporation Ltd is primarily involved in the generation and sale of bulk power to State power utilities. Other business of the group includes providing consultancy, project management & supervision, energy trading, oil & gas exploration and coal mining. The company is India's largest power generation company with a total installed capacity of 66885 MW at the group level. NTPC has 17% of the total installed capacity in India with a 23% generation share. The company's vision is to become a 130 GW+ company by 2032 of which 60 GW would be contributed by renewable energy.