NTPC share price hits fresh record high; top brokerages remain upbeat after Q1; here’s what they say

NTPC share price continued witnessing buying interest for the second consecutive session as it climbed nearly 3 per cent to hit its fresh record high of ₹417.40 in morning trade on BSE on Wednesday, July 31. NTPC shares opened at ₹413.70 against their previous close of ₹406.90 and rose 2.6 per cent to hit their fresh high. Around 10:10 am, the stock traded 2.5 per cent higher at ₹417.10 apiece. Equity benchmark Sensex was 0.27 per cent up at 81,671 at that time.

In an exchange filing on July 30, the company said the second and last part capacity of 26 MW out of 40 MW Ayodhya Solar PV Project (Uttar Pradesh) of NTPC Green Energy Limited (a wholly-owned subsidiary of NTPC Limited) is on commercial Operation from July 31. With this, the group installed and commercial capacity of NTPC has become 76,074 MW.

NTPC share price has been on a roll over the last year, surging nearly 94 per cent. Equity benchmark Sensex has gained 23 per cent in the same period.

Last Saturday, NTPC reported a 12 per cent year-on-year (YoY) rise in consolidated net profit at ₹5,506.07 crore for Q1FY25 against a profit of ₹4,907.13 crore in the same quarter last year.

Total income for the quarter rose nearly 13 per cent YoY to ₹48,981.68 crore from ₹43,390.02 crore in the same period a year ago.

Top brokerages remain upbeat

Several brokerage firms raised their target prices for the stock after the company's June quarter earnings.

Brokerage firm Nuvama Wealth Management maintained a buy call on the stock and raised the target price to ₹458 from ₹435 earlier, implying a 13 per cent upside potential from the stock's July 30 closing price of ₹406.90.

"With rising commissioning of projects in FY25–27—thermal and renewable energy (RE) at 7GW and 16GW, respectively—coupled with CERC (Central Electricity Regulatory Commission) incentive benefits, we retain estimates. Rising core RoEs (return in equities) and renewable subsidiary IPO stay key triggers for the stock," said Nuvama.

Brokerage firm Axis Securities also maintained a buy call on the stock and raised the target price to ₹450 from ₹420 earlier.

Axis pointed out that NTPC’s robust thermal assets provide cash flow visibility.

"Its aggressive renewable capacity addition target, where it can mobilise funds at a lower cost of debt (nearly 6 per cent versus 7-9 per cent compared to private peers), puts it in a competitive position. It has the potential to supply RE-RTC power, which can generate competitive tariffs," said Axis.

The brokerage firm believes NTPC is a good portfolio bet, given its stable dividend yield.

"A further rerating potential can not be ruled out if the peak deficits increase in future," said Axis.

ICICI Securities maintained a buy call on the stock with a target price of ₹495, valuing the thermal business at 17 times FY26E EPS (earnings per share) of ₹18 per share and the RE portfolio at 12 times FY26E EV/EBITDA.

"NTPC has also demonstrated its ability to execute RE capacities in a timely manner. It has set a target of 60GW by 2032. It has a locked-in capacity of 20GW, as of Mar‘24, operational capacity of 3.5GW and under-construction capacity of another 5GW and will start contributing significantly in profitability in coming years," said ICICI Securities.

Technical indicators favourable

Technical indicators are also indicating positive trends for the stock.

Jigar S. Patel, Senior Manager of Equity Research at Anand Rathi Share and Stock Brokers, observed that over the past six weeks, NTPC has been consolidating within the price range of ₹390-355, showing limited movement outside this zone. However, the stock recently experienced a breakout on the weekly chart, indicating a potential upward trend. This breakout has positioned NTPC's price well above the previous consolidation range.

"On the technical indicators front, the Relative Strength Index (RSI) on the weekly chart has moved into the overbought zone, surpassing the 70 mark. This suggests a strong bullish momentum, as the RSI typically reflects increasing buying pressure when it crosses this threshold," said Patel.

Patel recommends buying the stock during any pullback within the price range of ₹405-410, keeping the target price of ₹440 and a stop loss of ₹390 based on a daily close.

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