NTPC Share price today: ICICI Securities Maintain BUY with price target of Rs 165/share

NTPC Share price today: NTPC has continued to report strong operational numbers in Q3 FY21 on the back of power demand recovery. While reported standalone/consolidated PAT was Rs 33.1 bn/ Rs 38.8 bn, up 10.7%/21.2 YoY, adjusted PAT was Rs 33.1 bn/ Rs 39 bn, up 23.6%/35.5% YoY respectively. With 9MFY21 consolidated adjusted profit at Rs 116.8 bn, up 24% YoY, NTPC is expected to register 15% earnings CAGR over FY20-FY23E. Its green commitments remain on track with 1.4GW operational, 2.7GW under implementation and 1.4GW under tendering. Currently, share price of NTPC is Rs 99.8. 

In addition, NTPC has won 1.3GW in recent bids and is participating in the upcoming 5GW IREDA CPSU auction (expected by Mar’21). Overdue receivables declined by Rs 25 bn QoQ and a further Rs 10 bn in Jan’21 to Rs 157 bn (expect further Rs 80 bn reduction by Mar’21). NTPC announced an interim dividend of Rs3/share. Maintain BUY with an unchanged target price of Rs 165/sh.

NTPC Dividend announced:

NTPC announced a dividend of Rs3/share. It expects to continue paying a higher of 30% of PAT or 5% of net worth as an annual dividend going forward.

NTPC Decoding the quarter for the year ahead:

With reported EPS for the standalone/ consolidated entity at Rs 9.4/ Rs 10.4 and adjusted EPS at Rs 10.7/ Rs 11.8 in 9M FY21, ICICI Securities believes, NTPC is on course to achieve its FY21 target EPS of Rs 12.3/ Rs 14 (not adjusted for shares extinguished post-buyback). Rs 82.2 bn increase in standalone regulated equity in TTM plus THDC and NEEPCO addition have resulted in strong core earnings. A robust commissioning pipeline, supported by green initiatives will strengthen core earnings further.

Overdue receivables have declined substantially and stood at Rs 167 bn vs Rs 191.6 bn at Q2 FY21-end and further declined to Rs157bn by Jan’21-end. NTPC expects to receive Rs80bn more through tranche-II of the PFC/REC scheme by Mar '21. Total capacity commercialised till 9MFY21 reached 2,799MW and target for FY21/FY22 is 5,074MW/6GW at group level. Under-recovery was Rs5.7bn as at 9M FY21-end vs Rs 5 bn at Q2FY21-end. Company expects to close FY21 under-recovery at Rs 3.5 bn.