NTPC, India’s largest power utility, has been a key player in the country’s energy landscape. With a 17% share in India’s installed power capacity and 76GW operational capacity, NTPC has been a significant contributor to India’s electricity generation, accounting for 24% (422BU) of the total generation in FY24.
Looking ahead, NTPC is poised for further growth in the thermal power segment, with plans to add 25GW capacity by FY32. This includes projects under construction and future thermal projects to be awarded in FY25, in line with the CEA’s projections of 80GW additional thermal capacity by FY32. Additionally, NTPC’s subsidiary NGEL is focusing on renewables, targeting a capacity of 60GW by FY32, with operational capacity expected to grow from 3.3GW in FY24 to 15GW by FY27.
Given its expansion plans and stable cash flow, NTPC presents a compelling investment opportunity in India’s evolving energy sector. Our valuation of NTPC underscores its leadership position and growth potential. The regulated thermal power business is valued at 1.55x FY26F BV, while subsidiaries and JVs are valued at 1.9x FY26F regulated equity per share, with a 20% holding company discount.
In light of these factors, we initiate coverage on NTPC with an ADD rating and a target price of ₹385, positioning it as a strategic play on India’s energy transition towards 900GW.
Downside risks for NTPC include delays in plant commissioning, regulatory changes, and fluctuations in NGEL’s valuation.
Published on February 28, 2025.
