NTPC shares in deep-value zone, decadal growth opportunity ahead: CLSA

Shares of NTPC Ltd. saw a 1.5% increase on Wednesday, reaching ₹340 as brokerage firm CLSA projected a 37% upside for the stock following an analyst meeting. The firm maintained its 'outperform' rating on NTPC with a price target of ₹459 per share. CLSA noted that NTPC is trading in the "deep-value zone," trading at 10 times its earnings-per-share estimate for FY27, excluding the value of NTPC Green, which accounts for 24% of its market cap. The brokerage predicts a 45% earnings-per-share growth and a 230 basis points increase in return on equity over FY25-27.

NTPC, in its analyst meet, announced an increase in its financial year 2032 capacity target to 149 gigawatts, up from 130 gigawatts, marking a 15% increase over FY25-32. This growth is driven by its renewable capacity expansion amid plummeting polysilicon prices.

NTPC said, "it is raising the bar not only for capacity additions by 15% but also its transition initiatives, including carbon batteries." The company's efforts align with India's energy security and net-zero goals, offering a decadal growth opportunity, with CLSA stating, "India's energy security and net zero plan provides NTPC with a decadal growth opportunity and it sees upside risk to this target."

Broader implications of NTPC's developments include significant potential for growth as the company multiplies its renewable energy initiatives. The firm's increased capacity targets and transition strategies could bolster its competitive position against other industry players.

NTPC's future looks promising as it takes advantage of the declining polysilicon prices to boost its renewable energy capacity, further cementing its role in India's path towards energy security. CLSA's projection for NTPC's growth suggests a stable outlook, with the company expected to benefit from strategic initiatives and market conditions.