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NTPC share price rises 4% after CLSA retains buy call with target of Rs 140

NTPC shares trade higher than 5-day moving averages but lower than 20, 50, 100 and 200-day moving averages. Market capitalisation of the firm stood at Rs 86,577 crore as of today's session

twitter-logoBusinessToday.In | September 28, 2020 | Updated 14:38 IST
NTPC share price rises 4% after CLSA retains buy call with target of Rs 140
The stock price of NTPC also touched an intraday low of Rs 85.30, after opening at Rs 86.20

NTPC share price rose 4% in Monday's opening session after brokerage CLSA maintained a buy call on the stock with a target of Rs 140 per share.

CLSA maintained BUY with a target of Rs 140/share and raised its ESG score for NTPC by 11%. As per the broking house, NTPC has set lofty FY22 targets for itself and recommended buy rating NTPC as it will expand its regulated equity and expect to surprise on its renewable targets.

NTPC said on September 27, "It has invited bids for procurement of biomass pellets for its various thermal plants on the basis of domestic competitive basis (DCB) as part of its endeavour to reduce the burning of crop residue on farmlands that cause air pollution."

Following the update, NTPC share price touched an intraday high of Rs 88.3 on BSE, rising 4.25% against the last close of Rs 84.70. The stock price of NTPC also touched an intraday low of Rs 85.30, after opening at Rs 86.20. NTPC stock has risen 5.57% in the last 2 days of consecutive gain.

NTPC shares trade higher than 5-day moving averages but lower than 20, 50, 100 and 200-day moving averages. Market capitalisation of the firm stood at Rs 86,577 crore as of today's session.

The brokerage said NTPC is scaling-up its RE Capex with the emergence of profitable models. NTPC's strong asset commercialisation is not only driving double-digit regulated equity growth, but it is also reducing its capital work in progress, leading to ROE expansion. The stock is trading two standard deviations below its average at a 6.8x one-year forward PE.

It added, "Our analysis of the top 10 multi-cap funds, which make up 83% of the total, shows NTPC and PWGR make up only a small weight (2%) of the total AUM. Further, MF investment in NTPC has gone up significantly from 2% in FY16 to 21% in 1QFY21."

"We estimate NTPC to generate an 11%-13% ROE over FY20-23CL It is currently trading at a 0.7x 1-year forward PB," the brokerage added later.

Moreover, the company has opted out of the race to buy 51% stake held by Reliance Infrastructure in BSES Rajdhani Power and BSES Yamuna Power each due to lack of transparency in the bidding process, reported Cogencis.

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