Buy NTPC Ltd., target Rs 185.0 : Motilal Oswal Securities

Motilal Oswal Securities has Buy call on NTPC Ltd. with a target price of Rs 185.0. The current market price of NTPC Ltd. is 158.9. Time period given by analyst is year, when NTPC Ltd. price can reach defined target. NTPC has one of the best business models in the Indian power sector as RoE is assured and revenue is guaranteed by a tri-partite agreement with the RBI. NTPC is in the midst of major capacity expansion. Regulated equity, a key earnings driver, will grow at a CAGR of 14.9% to Rs 829 billion. We expect NTPC’s EPS to grow at a slower pace than regulated equity, but achieve healthy five-year CAGR of ~10% (over FY16-FY21) to Rs 19.5/share in FY21E.