NTPC Hits Record High with 5% Surge After Strong Q1 Results and Broker Upgrades

Shares of NTPC surged by 5% to reach a record high of ₹412.7 per share on July 30, following robust April-June quarter (Q1FY25) results. Brokerages remain optimistic about the stock, anticipating growth driven by the thermal and nuclear power sectors.

At 10 am IST, the NTPC share price was trading 3.63% higher at ₹408.20 per share on the NSE. NTPC shares have risen 32% in 2024 and 87% over the past year.

Jefferies reiterated its 'buy' recommendation for NTPC, raising the target price to ₹485 from ₹445 per share, expecting an acceleration in order execution. They believe the company's earnings prospects have improved, particularly in the thermal segment, with 9.6 gigawatts (GW) under construction and 15.2 GW set to be awarded.

Jefferies also sees nuclear power as a significant emerging opportunity, anticipating further stock re-rating as execution progresses.

JM Financial analysts also reaffirmed their 'buy' rating for NTPC, setting a target price of ₹451 per share. They cited the revival in thermal capital expenditure and the momentum in new growth areas such as nuclear power and coal mining as reasons for their bullish outlook.

In contrast, Kotak Institutional Equities maintained a 'sell' rating with a target price of ₹290 per share. They argue that NTPC’s current market price already reflects its growth ambitions while overlooking potential risks of lower-than-expected returns from renewable assets. They assign a multiple of 1.5x for the regulated return business and 1.2x for the renewable business.

Kotak noted that their revised fair value is based on a forward projection to September 2026 and an increase in under-construction capacity for both thermal and renewable power plants. They estimate that an additional 15 GW of coal capacity would increase NTPC's target price by ₹15 per share, and the inclusion of future renewable capacity targets of 50 GW would add another ₹15 per share.

For Q1FY25, NTPC reported a 13.5% year-on-year increase in revenue to ₹44,419 crore, with a profit rise of 11% YoY to ₹4,511 crore. Its EBITDA rose 9.5% YoY to ₹12,466 crore, though margins fell by 100 basis points to 28%.

Year-to-date, NTPC's stock has climbed over 31%, outperforming the Nifty 50's 14% increase. The ramp-up in renewable energy capacity and pilot projects in green hydrogen continue to be key factors driving the stock's re-rating, according to brokerage firms.