Synopsis: The power PSU reported a better-than-expected first quarter, supported by improved operations, capacity expansion and steady generation. Strong execution and an expanding project pipeline kept the company’s long-term outlook positive.
The shares of this large-cap company majorly engaged in generation and sale of bulk power to State power utilities and also provides project management and supervision, energy trading and many more were in focus after the brokerage sees 36 percent upside potential.
With the market capitalization of Rs. 3,40,208 Crores, the shares of NTPC Ltd closed at around Rs. 351 per share which is 15 percent discount from its 52 weeks high of Rs. 414 per share and is trading at a P/E of 12.2 whereas industry P/E stands at 22
Better-than-Expected Q1 Performance
The firm has had an excellent beginning to FY27, with Q1 consolidated net profit up 12% year-over-year. As per Macquarie, this positive surprise has been due to the significant addition of capacities during the quarter along with better plant availability.
Capacity Crosses 90 GW Mark
NTPC was still growing its generation capacity in the quarter with 1.8 GW of new capacity added. Out of which, there was 820 MW of thermal power, 250 MW of hydropower and 730 MW of renewable power. Total installed generation capacity now stands at 90.9 GW for the group. The firm also boasts of an execution pipeline of 35.7 GW of capacity under construction.
Improved Plant Availability Boosts Generation
The operational performance was excellent in the quarter. The PAF of the standalone coal plant improved to 94% from 93.5% in Q1 FY26 and 90.1% in FY26. The plant’s availability supported improved generation of electricity. This was evidenced by standalone generation of 93.6 BU, which marked an increase of 3% year-on-year.
Renewable Performance Remains Mixed
Solar energy assets within the renewable portfolio showed a higher utilization level, which positively impacted operations. Nonetheless, the generation from hydro energy was lower due to different operational environments for renewables. Nevertheless, the firm continued developing both the renewable and conventional energy portfolio.
Regulated Equity Continues to Expand
The consolidated regulated equity of NTPC rose by approximately 9% YoY due to the commissioning of new projects and increase in the regulated assets portfolio. A bigger regulated equity portfolio results in steady earnings growth since the regulated projects have reliable income in the long run.
Macquarie Maintains Positive View
Macquarie affirmed its “Outperform” recommendation on the stock with a target price of Rs 480 with an upside potential of 36 percent from its CMP after the impressive results of the quarter. In addition to adding more capacity, becoming more efficient and having an extensive pipeline under construction, the company is expected to grow in the long run.
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