NTPC hits over a decade high; reclaims Rs 2-trillion m-cap after Jan 2008

Shares of NTPC rose 4 per cent to hit the highest level in over a decade of Rs 209.30 on the BSE in Friday’s subdued intra-day trade. In comparison, the S&P BSE Sensex was down 0.22 per cent, at 10:51 am. In the past two weeks, the stock of the state-owned power generation company has rallied 12 per cent.
NTPC was trading at its highest level since October 2010. A sharp up move in the market price of NTPC helped the company reclaim its Rs 2-trillion market capitalisation (m-cap) after January 2008. At the time of writing this report, NTPC’s market cap stood at Rs 2.02 trillion, as per BSE data.
NTPC is India’s largest power generation company with a total installed capacity of 69134 MW at the group level. The company has 17 per cent of total installed capacity in India with 24 per cent generation share. The company’s vision is to become a 130 GW+ company by 2032 of which 60 GW would be contributed by renewable energy.
NTPC on Thursday announced that the second unit of 660 MW capacity of Barh Super Thermal Power Station, Stage-I (3×660 MW) will begin its commercial operation from August 1, 2023. With this, the standalone and group commercial capacity of NTPC will become 57,038 MW and 73,024 MW respectively, the company said.
NTPC has set out an aggressive capacity addition of 16,000 MW over FY24-26 on the renewable side most of which will be on the solar side whereas wind capacity will be to the tune of 4000-5000 MW.
NTPC has 3300 MW of operational capacity while 4600 MW of projects are under construction and projects to the tune of 12600 MW are at various stages of planning (PPA singed/ Projects bid won). At the group level, the operational green capacity was at 3300 MW.
On the thermal side, the company will add projects to the tune of 4600 MW and 3600 MW in FY24 and FY25. On the new projects, the company will only do brownfield expansions to the tune of 6000 MW and the same will be awarded in FY24.
In order to move away from coal assets, the company is planning to set up a JV with Nuclear Power Corporation of India Ltd (NPCIL) and mark its foray into the nuclear power generation space. The company has identified projects to the tune of 4200 MW projects in MP (2X700 MW) and Rajasthan (4X700 MW) out of which it is confident of adding 2000 MW by 2032, ICICI Securities had said in a Q4FY23 result update. The stock was trading close to its 12 month target price of Rs 210 per share.
CARE Ratings in rationale said that NTPC’s ratings continue to derive strength from group’s strong revenue visibility on account of its long-term power purchase agreements (PPAs), stability in cash flow and assured return provided by cost plus tariff structure for vast majority of its capacity. The ratings continue to draw comfort from the linkage fuel availability for its thermal plants along with improving captive coal output in the recent years.
It added that the ratings also favourably factor in NTPC’s consistently healthy operating performance with its plant load factor (PLF) remaining higher than all-India average PLF.

The ratings derive strength from the group’s comfortable financial risk profile marked by comfortable profitability and debt coverage indicators. The ratings take cognisance of the risks associated with the implementation of its large debt-funded projects and relatively weak financial health of its power off-takers, it said.