NTPC rating upgrade: Can nuclear energy, battery storage push stock to Rs 400 mark?

Shares of NTPC rose 2% on Thursday after HSBC upgraded its rating from 'Hold' to 'Buy'. The brokerage firm raised NTPC's target price to ₹400 per share, up from the previous target of ₹385. HSBC highlighted NTPC's leading role in India's power generation sector, with notable prospects in battery storage and nuclear energy contributing to its growth pipeline. These developments are set to place NTPC at the forefront of the country's nuclear power expansion, according to HSBC.

The stock rose to an intraday high of Rs 330.65 on Thursday against the previous close of Rs 325.60 on BSE. Market cap of the firm stood at Rs 3.20 lakh crore.      

Despite the stock's recent gains, NTPC has delivered negative returns year-to-date. Analysts have attributed the company's recent under performance to weaker power demand and execution delays. However, HSBC expressed optimism about a reversal in these trends, noting that power demand growth is likely to benefit from a low base in FY25.

Additionally, execution challenges are easing with the recent commissioning of two thermal plants, collectively adding 1.3 gigawatts to NTPC's capacity. HSBC has also emphasised that a substantial portion of NTPC's planned capital expenditure of ₹7 lakh crore by 2032 will be regulated, providing visibility on returns.

NTPC's strategic focus and substantial capital expenditure plans have garnered positive sentiment among analysts. As NTPC advances its projects, particularly in nuclear energy, it has the potential to significantly impact India's energy landscape. Future growth prospects appear promising as the company continues to address previous hurdles and positions itself strategically in emerging power segments.