Stock in Action – NTPC 26 November 2024

Highlights

• NTPC share price has recently gained significant attention following its 20% upside potential highlighted by Bernstein.  
• NTPC Green Energy IPO is expected to debut on November 27, adding momentum to the parent company’s stock performance.  
• Bernstein NTPC target of ₹440 per share underscores the firm’s confidence in NTPCs growth despite the current valuation challenges.  
• Green Hydrogen Mobility Project in Leh has positioned NTPC as a pioneer in clean energy at the world’s highest altitude.  
• NTPC renewable energy expansion efforts include scaling up RE capacity & establishing hydrogen hubs across India.  
• NTPC stock analysis shows a consistent growth trajectory supported by strong fundamentals & rising power demand.  
• NTPC Green Hydrogen Leh project combines solar power & hydrogen fuel technology, reducing carbon emissions & fostering energy self-reliance.  
• NTPC 12month target reflects steady growth prospects & alignment with global industry valuation metrics. NTPC vs global peer’s valuation shows the company is trading in line with industry averages, enhancing its appeal for long-term investors.  
• NTPC Green Energy listing date on November 27 will give investors direct access to the company’s rapidly expanding green portfolio.  

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Why NTPC Share is in News?  

1. Green Hydrogen Mobility Project in Leh: 

NTPC has launched a ground-breaking project in Leh, Ladakh, at an altitude of 3,650 meters. This initiative includes:

1.    A 1.7 MW solar plant.
2.    A hydrogen filling station capable of producing 80 kg of hydrogen daily.
3.    Five hydrogen powered intercity buses capable of covering 300 km per fill.  

This project is expected to reduce carbon emissions by 350 metric tons annually & contribute the equivalent of planting 13,000 trees. NTPC is also planning to replicate such hydrogen mobility projects across India, showcasing its leadership in clean energy initiatives.

2. Renewable Energy Expansion:

 NTPC has been rapidly scaling its renewable energy capacity. It plans to establish a hydrogen hub in Andhra Pradesh & invest significantly in solar & wind energy projects to achieve its ambitious green energy goals.

3. NTPC Green Energy Ltd. Listing:

The upcoming listing of NTPC Green Energy Ltd. is a major milestone. This subsidiary will provide investors direct exposure to NTPCs renewable energy portfolio, which may lead to a shift in the valuation dynamics of the parent company.  

Financial Performance

For FY25, NTPC share price are trading at a valuation of 16x earnings & 10x enterprise valuetoEBITDA, aligning with global industry peers. 

Over the last 12 months, the stock has delivered a strong return of over 40%, reflecting its robust operational performance & investor confidence.  

Brokerage Overview of NTPC Shares

Bernstein’s Perspective

Bernstein has maintained an Outperform rating on NTPC, highlighting the following: 

• Rising power demand: As India experiences a surge in energy requirements, NTPCs core operations remain a critical enabler.  
• Evening energy shortages: NTPCs efficient operations position it to address gaps in power supply.  
• Cost advantage: The company’s competitive cost of debt enhances its financial stability & profitability.

Despite the lack of significant catalysts for further upside, Bernstein notes that there are minimal risks of downside, making NTPC a stable investment option. The brokerages price target of ₹440 implies a 20% upside from the current levels.  

Kotak Institutional Equities View  

In contrast, Kotak Institutional Equities has assigned a Sell rating to NTPC, citing the following concerns:  

• The listing of NTPC Green Energy may result in a lower valuation for the parent company, as the renewable energy operations will be delinked.  
• NTPCs coal heavy portfolio may limit growth opportunities, with investment allocations being concentrated in coal based power.  
• K0tak’s price target for NTPC stands at significantly below its current trading price.  

Conclusion

NTPC Ltd. represents a compelling investment story with a balanced risk reward profile. While the company’s focus on green hydrogen & renewable energy positions it as a key player in India’s energy transition, its dependence on coal & the potential valuation adjustments due to NTPC Green Energy’s listing pose challenges. Brokerage opinions are divided—Bernstein emphasizes NTPCs stability & growth prospects with a 20% upside, while Kotak highlights concerns around future growth limitations. Investors should consider NTPC as a long-term play in India’s evolving energy landscape, especially as it strengthens its focus on sustainability & clean energy initiatives.  With its strong track record, ambitious green energy projects, & market confidence, NTPC remains a stock to watch in the coming months.