NTPC shares rise 2% as Morgan Stanley sees 14% upside

March 03, 2023 / 10:31 AM IST

Shares of NTPC gained 2 percent connected March 3 with Morgan Stanley saying it sees astir 14 percent upside.

The overseas brokerage steadfast has an overweight standing connected shares of NTPC with a people terms of Rs 198. At 10:16am, shares of the institution were trading astatine Rs 173.8, up 1.9 percent, connected the BSE. The banal is trading person to its 52-week precocious of Rs 182.95.

Morgan Stanley sees immoderate catalysts for the banal to rally more. These are monetisation of renewable assets successful the adjacent term, caller thermal orders, little competitory strength successful acquiring stressed assets, and commissioning of pipeline plants.

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Moneycontrol had reported connected March 1 that the powerfulness ministry directed its nationalist assemblage undertaking NTPC to run and make each its gas-based powerfulness plants to afloat capableness for a month, said Alok Kumar, secretary, Ministry of Power. This is considering the highest powerfulness request is expected to deed 229 gigawatt (GW) successful April.

Sharekhan by BNP Paribas sees the double-digit maturation successful powerfulness request with highest request of much than 200 GW benefitting NTPC successful presumption of higher thermal Plant Load Factor (PLF) and thrust the summation successful PLF’s inducement income. The crisp 49 percent on-year autumn successful discom owed to powerfulness procreation companies to fortify NTPC’s equilibrium sheet, it said.

PLF is the ratio of mean powerfulness generated by the works to the maximum powerfulness that could person been generated for a fixed clip period. It is commonly considered arsenic a metric to cheque ratio of a works by measuring a powerfulness plant’s capableness utilisation.

Strong commercialisation target, improving thermal PLF, fixed precocious powerfulness request and absorption connected lowering fixed outgo under-recoveries makes NTPC arsenic 1 of the safest bets successful the existent volatile environment, said Sharekhan.

Strong maturation outlook visibility and steadfast Return connected Equity of 14-15 percent on with imaginable worth unlocking done number involvement merchantability of renewable vigor assets marque NTPC valuation charismatic astatine 1.1 times FY25 Price to Book Value (P/BV) which is astatine a steep 26 percent discount to humanities mean P/BV multiple, the brokerage steadfast said, portion adding that the banal offers a steadfast dividend output of 4-5 percent.

Sharekhan has maintained its ‘buy’ telephone connected NTPC banal with an unchanged people terms of Rs 200.