NTPC: Stock analysts share views on targets, dividend yield, NTPC Green Energy stake

Following a mixed set of numbers for the March quarter, stock analysts are neutral-to-positive on NTPC Ltd shares. Investors may pay heed to on-time commissioning of thermal and renewble energy (RE) capex, rising contribution of subsidiaries and JV profits and any increase in peak deficit, driving up plant load factors (PLFs) over FY26–27, they said.

MOFSL has reiterated its 'Neutral' rating on the stock with a target price of Rs 383, citing tempered growth expectations and valuation concerns. From FY25 to FY27, capacity expansion is expected to be subdued—around 5 per cent at the standalone level and 9 per cent at the consolidated level (excluding NTPC Green Energy Ltd). 

NTPC Green Energy, which accounts for nearly 17 per cent of MOFSL’s sum-of-the-parts valuation, continues to face execution challenges. In FY25, it commissioned only 1.9 GW, including its 50 per cent share in the 2.1 GW Ayana acquisition—well below its 3 GW target.

Additionally, the projected NTPC dividend yield of 2.7 per cent for FY27 is considered modest, especially compared to peers like Power Grid Corporation, which is expected to yield 3.4 per cent.

Nuvama in another note said NTPC's flattish growth in adjusted PAT came despite a 4 per cent rise in regulated equity, which translated into a core return on equity (RoE) of 15.8 per cent—slightly below the 17 per cent recorded in Q4FY24. The primary drag came from a decline in dividend income from subsidiaries, which fell to Rs 780 crore from Rs 98 crore a year earlier, Nuvama said.

"On a consolidated basis, however, the story was more upbeat. Adjusted PAT surged by 27 per cent year-on-year, powered by strong contributions from NTPC’s joint ventures and subsidiaries. Additionally, fixed-cost under-recovery improved quarter-on-quarter, narrowing to Rs 460 crore in Q4FY25," Nuvama said.

Despite modest earnings growth expectations—a 7 per cent EPS CAGR over FY25–27E— Nuvama continues to view NTPC as its top pick in the power itilities space. 

"The stock remains attractively valued at just 1.5x FY27E price-to-book. This, coupled with a substantial ~22 GW capex pipeline across thermal, hydro, and renewable energy, as well as the potential upside from higher CERC incentives, underpins the positive view," it said.

Nuvama maintained a ‘BUY’ rating on the stock, with a revised sum-of-the-parts target price of Rs 404 (down from Rs 412). This is based on 2.5x FY27E standalone book value and valuing NTPC Green Energy at a 30 per cent discount to its current market price.