SBICAP Securities maintains buy on NTPC, target price Rs 154

SBICAP Securities has maintained its buy rating on NTPC in the long term with a target price of Rs 154. Shares of NTPC gained 2.35% to close at Rs 117.80 on Friday even as BSE Sensex closed 215.76 points at 40,359.41.

Company Financials

For the quarter ended 30-09-2019, the company has reported consolidated sales of Rs 24459.70 crore, down -5.67% from last quarter sales of Rs 25931.11 crore and up 4.76% from last year same quarter sales of Rs 23347.95 crore The company has reported net profit after tax of Rs 3285.01 crore in the latest quarter.


Investment Rationale

Given concerns around dwindling coal PLFs/demand weakness the stock has corrected and is now available at 1.0x/1.0x FY20e/FY21eP/B at a RoE of 11%. Despite this, the brokerage highlight that the company reported strong profitability in Q2, which could sustain going into H2FY20.