Axis Securities states that NTPC is a solid choice for a portfolio due to its consistent dividend yield. It also notes that additional rerating potential may arise in the event that peak deficits rise in the future as well as from value unlocking through the use of green energy.
On January 4, early trading saw NTPC shares rise by almost 4%. The stock was trading on the NSE at Rs 316.90 at 10 am. Analysts at Axis Securities began covering the stock on January 4th, recommending a buy with a target price of Rs 345 per share.
According to the Axis Securities report, NTPC is well-positioned in an expanding peak power cycle due to its sizable conventional power portfolio and firm cost-plus business model. This will enable growth driven by renewable energy sources and help maintain steady cash flows, according to analysts. According to the report, NTPC is a solid choice for a portfolio due to its consistent dividend yield. However, it also notes that additional dividends could be paid out if peak deficits rise in the future and if value is unlocked through energy efficiency.
According to the report, NTPC will benefit from a revival of thermal capex to address the current power deficit. As renewable power is inherently seasonal, thermal additions will be critical to providing the base capacity and for grid stability, which will continue to drive its demand, the authors of the study stated.
NTPC will be awarding a thermal capacity of 11.2 GW, which will be tendered over the next 12 months. Currently, NTPC has about 10 GW of thermal capacity under construction, which is anticipated to be commissioned by FY2026.
NTPC has set a lofty goal to achieve 60 GW of renewable energy.
(RE) from the current 3.3 GW by FY32,” the report continues.
