NTPC’s management has reiterated its commitment to contribute 26 GW out of India’s targeted 80 GW capacity addition over the next decade. Jefferies sees this as a significant growth lever, especially with the India power demand expected to grow at a Compounded Annual Growth Rate (CAGR) of 6% compared to the earlier expectations, which were in excess of 7% due to the recent softness in demand, according to Jefferies.
Despite this, thermal power is expected to retain a key role in India’s energy mix, with Jefferies highlighting persistent peak power deficits and the continued high costs associated with battery storage as supporting factors.
The brokerage has raised its financial year 2026-2027 Earnings Per Share (EPS) estimates by 3% – 5%, reflecting NTPC’s stronger-than-expected Q4 results. It also believes that the successful execution of projects will be critical in unlocking further upside, as it would reinforce confidence in the company’s earnings growth trajectory.
Jefferies notes that NTPC could also benefit from:
- Higher ROE from captive coal mining, potentially delivering earnings surprises.
- Faster-than-expected commissioning of power plants, which may trigger a valuation multiple re-rating.
Potential execution delays due to land acquisition hurdles and a sharp downturn in power demand, which could dampen growth, are some of the key risks cited by Jefferies for NTPC.
However, Jefferies’ bull-case scenario for NTPC ascribes a price target of ₹600 on the PSU, implying a potential upside of 74% from Friday’s close, supported by faster project execution and earnings delivery, which could lead to a sharp re-rating of the company’s valuation multiple.
Out of the 27 analysts that have coverage on NTPC, 23 of them have a “buy” rating on the stock, while two each have a “hold” and “sell” recommendation.
Shares of NTPC are currently trading little changed, having given up early gains at ₹344.2. The stock is down 5% in the last one month.
