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NTPC: Capacity addition to gather momentum
- NTPC reported robust Q1FY25 results. Gross generation and energy sold grew by 10.6% YoY (97.9 billion units) and 11% YoY (91.3 billion units) whereas the PLF of coal stations improved by 296 bps YoY to 80.4% in the quarter. The installed and commercial capacity as of Q1FY25 stood at 76048 MW each.
- NTPC has been the only company which has added coal-based capacities and reached an installed base of 76000 MW. Going ahead, NTPC has ~21000 MW of capacities under construction out of which coal/Hydro and renewables stands at 9560/2255/9214 MW respectively. This we believe will lead to 11% generation growth supported by strong PLF’s (averaging above national level PLF’s) on thermal business and will help regulated equity growth at a CAGR of 9% from ₹ 87713 crore in FY24 to over ₹100000 crore by FY26E.
- The company plans to reach 16000 MW of renewable capacity by FY27E. Currently, the company has 3500 MW of installed renewable capacity. It has also signed a supplementary JV agreement with NPCIL for development of nuclear power projects. Its also planning project of 2.8 GW capacity (Approximate Cost - 2017 level: ₹42,000 crore) and exploring SMR technology in collaboration with BARC.
- Strong presence in the thermal power capacity and strong scale up in the renewable space makes NTPC as our top pick in the utility space. We maintain our BUY rating on NTPC target pegged at ₹ 500 per share (based on 2.7x FY26E Book Value).
Disclaimer – I ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is acting as a distributor to solicit bond related products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.
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