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NTPC stock gains 7% on inking MoU with L&T for methanol plants

Following the update, shares of NTPC touched an intraday high of Rs 101.85, rising 7.61% on BSE against its earlier close of Rs 94.65. NTPC stock has gained after 2 days of consecutive fall

twitter-logoBusinessToday.In | August 20, 2020 | Updated 15:44 IST
NTPC stock gains 7% on inking MoU with L&T for methanol plants
NTPC shares trades higher than 5, 20, 50 and 100-day but lower than 200-day moving averages.Market capitalisation of the firm stood at Rs 99,588 crore as of today's session

Share price of NTPC gained over 7% in Thursday's session after L&T Hydrocarbon Engineering signed MoU with the company for CO2 supply to methanol plants.

"L&T Hydrocarbon Engineering (LTHE), a wholly-owned subsidiary of Larsen & Toubro (L&T), has signed a memorandum of understanding with NTPC Ltd, wherein LTHE shall be the Engineering, Procurement and Construction Management partner to build CO2 to Methanol demonstration Plant in NTPC Power Station," L&T said in a regulatory filing.

Following the update, shares of NTPC touched an intraday high of Rs 101.85, rising 7.61% on BSE against its earlier close of Rs 94.65. NTPC stock has gained after 2 days of consecutive fall.

NTPC shares trades higher than 5, 20, 50 and 100-day but lower than 200-day moving averages.Market capitalisation of the firm stood at Rs 99,588 crore as of today's session.

As per the filing, LTHE and NTPC will further collaborate to accelerate the development and subsequently commercialize CO2 to Methanol plants, under this MOU.

NTPC announced its April-June quarter results 6 days ago and its stock price has risen 15% in the same period. Company's consolidated net profit fell 5.9% YoY to Rs 2,948.94 crore in Q1 FY21 as against Rs 3,132.73 crore during the same quarter in a year ago.

Total income during April-June 2020 fell to Rs 26,794.68 crore compared with Rs 27,353.36 crore in the year-ago period. The firm's total expenses were at Rs 22,649.04 crore, against Rs 23,814.32 crore a year ago.

Morgan Stanley said it has an overweight rating with the target at Rs 138 per share while CLSA kept buy rating with the target of Rs 140 per share, adding," It is of the view that the company can exceed its FY30 RE target and can match/exceed India's COP21 commitments of 40% non-fossil capacity.

Dolat Capital said," We maintain estimates in FY21. Stock is trading at an attractive P/BV of 0.7x FY22E". The brokerage recommended buy rating on the stock with a target price of Rs 147.

Analysts at Emkay Research expect 4.8 Gw of capacity to achieve commercialisation for FY21, followed by another 5.4 Gw in FY22. Emkay Research in its report added that rising capitalisation may drive regulated equity returns and the improved earnings visibility boosts sentiment for the attractive stock.

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