Buy NTPC, target price Rs 196: ICICI Securities

ICICI Securities has buy call on NTPC with a target price of Rs 196. The current market price of NTPC is Rs 156.3.
Time period given by analyst is one year when NTPC Ltd. price can reach defined target.

NTPC Ltd., incorporated in the year 1975, is a Large Cap company (having a market cap of Rs 149280.18 Crore) operating in Power sector.


NTPC Ltd. key Products/Revenue Segments include Generation Of Electricity, Consultancy Income, Other Operating Revenue, Lease Rentals and Coal for the year ending 31-Mar-2021.


Financials
For the quarter ended 31-12-2021, the company reported a Consolidated Total Income of Rs 33783.62 Crore, up 2.08 % from last quarter Total Income of Rs 33095.67 Crore and up 19.01 % from last year same quarter Total Income of Rs 28387.27 Crore. Company reported net profit after tax of Rs 4318.12 Crore in latest quarter.

Investment Rationale
The brokerage maintains BUY rating with an unchanged SoTP-based target price of Rs196/sh and FY24E standalone / consolidated EPS of Rs19.2 / Rs20. NTPC is currently trading at FY24E standalone P/BV of 1x (P/E of 8x) and FY24E consolidated P/E of 7.3x.

Key downside risks: 1) Delay in capitalisation of assets leading to lower capital efficiency, and 2) lower-than-expected utilisation due to weak demand resulting in lower incentive income.

Promoter/FII Holdings
Promoters held 51.1 per cent stake in the company as of , while FIIs owned 14.74 per cent, DIIs 30.77 per cent.