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  • CMP : 276.2 Chg : 7.25 (2.70%)
  • Buying Range : 168-172
  • Target : 192.0 (12.94%)
  • Stoploss : 159.0
  • Target Period : 3 Month

12 Jan 2023

Breakout from decade long consolidation indicates structural turnaround...

NTPC monthly bar chart

Technical Outlook
BSE PSU sector index has given a resolute breakout from decade long consolidation (2010-2021) indicating major turnaround in long term price structure. One of the leading PSU NTPC’s share price has given a resolute breakout from a decade long consolidation indicating structural turnaround and remains our one of the preferred pick in PSU pack

Over past two months, share price has retested its breakout level and made a strong bounce validating elevated support at decade long resistance which is now acting as support. Another key observation has been that stock has held its 12month rising EMA on numerous occasions over past two years, each time rallying back to fresh 52-week high. WE expect same rhythm to be maintained backed by strong price structure

We expect share price to head towards ₹200 which is identical highs of CY09 and CY10

Amongst oscillators, monthly MACD is seen diverging from its 9 period average thus corroborating bullish stance and strong upward momentum over medium t

Fundamental Outlook

NTPC is India’s largest power generation company with a total installed capacity of 69134 MW at the group level. · NTPC has 17% of total installed capacity in India with 24% generation share · The company’s vision is to become a 130 GW+ company by 2032 of which 60 GW would be contributed by renewable energyIt has grown through organic and inorganic routes and added around ~30 MT of capacity in the last three years. It has shown its capability to successfully integrate the acquired assets and ramped up its utilisation in a profitable manner.

NTPC posted a good set of numbers for Q2FY23. Revenues came in at ₹ 41015.1 crore vs. our estimate of ₹ 33969 crore .EBITDA was at ₹ 9520.6 crore vs. our estimate of ₹ 7224.4 crore, up 23.3% YoY  Reported PAT was at ₹ 3330.1 vs. our estimate of ₹ 3155.6 led by higher than expected depreciation and Interest charges.

NTPC has 3000 MW commercialised renewable capacity while ~5000 MW is under construction. Capacity addition to be around 13 GW in FY24-25. The company expects to spend ~40% of total capex planned for FY23, FY24 on renewable projects. NTPC currently has ~5348 MW of renewable ongoing projects. Projects worth ~650 MW have been won recently. The company will be adding renewable projects to the tune of 18-19 GW till FY25.

The company incurred a capex of ₹ 16664.2 crore in H1FY23 and set a target of ₹ 27500 crore for FY23E. For FY24 & FY25, capex value was at ₹ 25000- 26000 crore and ₹ 20000-22000 crore, respectively

On the green initiatives side, the company is focusing on many areas like a) green hydrogen projects, b) pilot projects for synthesising green methanol, c) entering into power distribution business (the company had put in a serious bid for Chandigarh circle wherein it was third in the biding process), d) Nuclear power for which they are in discussions with all necessary government entitiesNTPC produced 8.4 MT of coal from its three coal mines in H1FY23 vs. 5.25 MT in H1FY22. Production from coal mines is expects to reach 50 MT by FY27E. The company expects to commence operation of two more coal mines (Kerandari and Badam) in early FY24E.

Follow up summary of Gladiator Stocks

Other product open recommendations

Date Product Scrip Name Market Strategy RP Target Stoploss Time Frame
01-12-2022 Momentum Pick CYIENT Cash Buy 848 925 784 30 Days
30-12-2022 Momentum Pick Gujarat Pipavav Cash Buy 102 116 94 30 Days
02-01-2023 Momentum Pick HEG Cash Buy 1070 1145 1012 14 Days
06-01-2023 Momentum Pick Balmer lawrie Cash Buy 132 142 123 14 Days
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Source: Company, ICICI Direct Research


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