NTPC Q4 Results Review: ICICI Securities Maintains 'Buy', Hikes Target Price — Here's Why

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ICICI Securities Report

India is witnessing strong power demand growth in post-Covid-19 times and we expect the base and peak power demand to grow at 6% each over the next couple of years. Firm capacity addition has been low in the past five years; thus, to meet peak demand, India has to fall back on thermal capacity, and NTPC has the best-performing thermal capacity in India.

Thus, we believe, as power demand continues to grow at 6% per year, India may need to add more thermal capacity to meet the medium-term demand before storage solutions become economically viable. NTPC is likely to add to this thermal capacity.

NTPC group has also demonstrated its ability to execute RE capacities and has set a target of 60GW by 2032. It has operational RE capacity of 6.8GW and another 14.6GW RE capacity under-construction as of Mar’25; this could start contributing significantly to profitability in coming years.

It is targeting to add >11GW capacity in FY26.

We maintain Buy on the stock with target price of Rs 442 (vs Rs 430 earlier), valuing the thermal business at 15x FY27E EPS and NGEL (RE portfolio) stake adjusted and discounted by 20%.

Key risks:

1. Delay in execution of thermal and RE projects; and

2. increase in cost of execution.

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