Buy NTPC; target of Rs 421: Prabhudas Lilladher

Moneycontrol • 1 day ago

Original source

Key Investment Pillars

  • Renewable capacity expansion: NTPC targets capacity additions of ~8.0GW, ~9.6GW, and ~10.9GW in FY27E, FY28E, and FY29E, respectively, driving installed capacity to ~118GW by FY29E.
  • Thermal additions: The company plans to initiate another ~4.8GW of thermal projects, largely during Q1/Q2FY28, with an equal split between pithead and non-pithead locations.
  • Transmission constraints and curtailment: NTPC is addressing transmission bottlenecks and minimizing renewable energy curtailment through measures like temporary GNA connectivity and alternative market sales.
  • Storage and hydro growth: The company is targeting ~47GWh of battery energy storage capacity and developing pumped hydro projects, positioning storage as a key growth opportunity alongside renewables.

Thesis Validation Checklist

  • Capacity addition milestones: Achieving the targeted capacity additions of ~8GW in FY27E and ~9.6GW in FY28E.
  • Transmission connectivity progress: Easing of transmission constraints, particularly in the Khavda region, and completion of the Green Energy Corridor Phase III.
  • Renewable energy curtailment: Reduction in curtailment levels and successful implementation of measures to minimize losses.
  • Storage project execution: Commissioning of the targeted battery energy storage capacity and progress on pumped hydro projects.
  • Financial performance: Improvement in profitability, driven by higher generation, improved PAF, and lower fixed-cost disincentives.