NTPC reported a standalone revenue of Rs 426 billion in Q1 FY26, 6% below our estimate of Rs 453 billion (-4% YoY), as there was a decline in power generation. Ebitda came in at Rs 103 billion (-17% YoY), 17% below our est., pressured by a surge of 86% YoY in other expenses.
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Motilal Oswal Report
We reiterate our Neutral stance on NTPC Ltd. with a target price of Rs 380. After a 17% correction in the share price over the last 12 months, valuations at 11x FY27 P/E appear relatively reasonable, even as the long-term project pipeline continues to build up, supported by an expanding footprint in nuclear, PSP, renewables, and green chemicals.
However, we maintain a cautious view on execution, especially at NTPC Green Energy Ltd., even though management has guided that 87/80% of capacity slated to be commissioned in FY26/27 already has power purchase agreement tied up.
Further, we believe valuations for NGEL (15% of our SOTP) have little room for re-rating and may continue to face pressure. Lastly, we believe the FY27E dividend yield of 2.9% remains modest and lower than peers such as Power Grid (FY27: 3.4%).
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