The brokerage firm, Jefferies is bullish on NTPC, India’s largest power generation company. According to them, the company’s strong growth potential driven by its capacity expansion plans, focus on renewable energy, and earnings recovery in the coming quarters, positions it well for long-term growth.
Jefferies bullish on NTPC’s growth, sets target price at Rs 500
Despite a slight miss in its third-quarter earnings for fiscal year 2025, Jefferies maintains a “Buy” rating on the stock. The firm has set a price target of Rs 500 for the stock, based on a 2.5x price-to-book (PB) multiple for FY27E.This valuation reflects a 9% premium over the past upcycle average, with the brokerage firm highlighting NTPC’s better visibility on its growing renewable energy business.
As Jefferies points out, “Execution of projects will drive upside in NTPC from current levels, as it will give credibility to the earnings growth story.”
Let’s take a look at the key reasons why the brokerage firm remains optimistic about NTPC’s prospects
Jefferies on NTPC’s Q3FY25 profits: Slight miss, but recovery expected
Jefferies is optimistic about a strong recovery in the fourth quarter. The brokerage firm notes that under-recoveries during Q3 were more than anticipated, but these are expected to reduce significantly by Q4, bringing in a much-needed boost to earnings.
“Fixed cost under-recovery was Rs 4.7 billion in Q3FY25 compared to Rs 7.4 billion last year, indicating a positive shift,” the brokerage firm added. The firm also pointed out that NTPC is on track to commission an additional 2.7 GW thermal and 2.4 GW renewable energy (RE) capacity in Q4, setting the stage for strong growth going forward.
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Focus on renewable energy and long-term goals
As per the Jefferies report, one of NTPC’s major strengths is its ongoing focus on expanding its power capacity.
The company has made progress in both thermal and renewable energy sectors. In the short term, while the third-quarter earnings fell short of expectations, NTPC’s management remains confident about Q4FY25, with plans to add 2.7 GW in thermal capacity and 2.4 GW in renewable energy.
“NTPC’s renewable energy focus remains at the forefront with 3.5 GW operational and 10.3 GW under construction. With a 17.5 GW renewable energy pipeline already in place,
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