Apr'25 View on NTPC Ltd

NTPC (National Thermal Power Corporation) Ltd along with its subsidiaries/ associates & JVs is primarily involved in 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. • Q3FY25 earnings were partly impacted by reversal in regulatory deferral account. • NTPC has so far added 640 MW in 9MFY25 versus targets of 7 GW for FY25E. • We expect NTPC’s commercial capacity (standalone) to grow to 60GW by FY25E. • Valuations at 1.6X P/B and 13.4X P/E may appear more palatable but still hold execution risks and consequent earnings downgrades. • Maintain SELL with a revised SoTP based FV of Rs305 (Rs310 earlier). Q3FY25 Earnings update: Positives: • NTPC reported standalone PAT of ~Rs4700cr (+3% yoy, +1% qoq) for Q3FY25, marginally ahead of our expectations. • NTPC plans to commission 2.7 GW of coal capacities in FY25E. Negatives: • Core ROE (standalone) at 17.1% was healthy but a tad lower than 18% in Q3FY24. • CMP is still disregarding some of the risks from delayed execution and lower- than-expected returns from renewable assets.