NTPC shares: Should you buy, hold or sell stock post Q2 results?

NTPC's September quarter Ebitda fell 8 per cent year-on-year (YoY) and was short of analyst expectations, thanks to a sharp rise in other opex. Post its Q2 results, a few analysts are neutral-to-positive on NTPC shares. They noted that the focus on renewable energy (RE) continued with the NTPC group adding 485 MW of commercial RE capacity in H1FY25, with 90 MW attributable to NTPC itself and 395 MW to the group companies.

MOFSL said it has a 'Neutral' rating on the stock with a target price of Rs 450, suggesting 12 per cent potential upside ahead.  

NTPC said its profit for the quarter rose 14 per cent YoY to Rs 5,380 crore, boosted by regulatory deferral income of Rs 2,300 crore for the quarter. Standalone revenue for Q2 at Rs 40,300 crore came in 3 per cent, which was below MOFSL's estimate of Rs 41,700 crore. The miss was due to a decrease in the average coal price, which fell from Rs 3,791 per tonne to Rs 3,584 per tonne.

"We cut our standalone FY25E adjusted PAT by 6 per cent to Rs 19,900 crore, primarily due to weaker profitability observed during the quarter.
With a capex of Rs 17,400 crore for 1HFY25, NTPC remains focused on its ambitious project pipeline, including an IPO for NTPC Green Energy Limited (NGEL). The aim is to achieve a renewable energy (RE) capacity target of 60GW by FY32," MOFSL said.

Nuvama said NTPC is its top pick in the power utility space. It maintained its estimates, given its 23 GW-plus new capacity addition CERC incentive benefits. This brokerage has kept its target price unchanged at Rs 458 while rerating its ‘Buy’ call on the stock.

MOFSL said the management has expressed confidence in the timely execution of its RE projects. "NGEL will commission 3GW/5GW/8GW capacities in FY25/FY26/FY27, while NTPC will add 2.7GW/8.0GW thermal capacities in FY25/FY26. Thermal pipeline beyond FY26 includes 8.8GW of projects with PPA visibility likely to be achieved by the end of CY24 for this pipeline," it said.