NTPC stock rises on positive Q4 numbers; is it a buy?

NTPC Ltd share price: Shares of NTPC (NSE: NTPC) climbed nearly 1 per cent on NSE on May 22, after the company released its March quarter (Q4FY23) numbers post-market hours on Friday. At closing, NTPC's scrip stood at Rs 174.2 on the NSE, up 0.52 per cent.

The earnings release showed that the power generation company registered a growth of 1 per cent in its standalone profit after tax (PAT) to Rs 5,672.3 crore for Q4FY23 against Rs 5,618.3 crore a year ago. The company’s revenue during the quarter under review surged 20.3 per cent to Rs 41,317.7 crore from Rs 34,358 crore in the corresponding quarter of the previous fiscal. NTPC’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) was up 3.7 per cent to Rs 11109.3 crore as compared to Rs 10,710.7 crore a year ago.

The company’s margin — a key measure of profitability for a business — declined to 26.89 per cent in the March quarter as compared to 31.17 per cent a year ago.

The board has declared a final dividend of Rs 3 per equity share which is subject to the approval of the shareholders in the ensuing annual general meeting (AGM).

Emkay Global has maintained a ‘buy’ call on NTPC with a target price of Rs 200 apiece. “High utilisation, strong capacity addition, and RE monetization are all positives for the company, in our view,” the brokerage said.

Nuvama has also maintained a ‘buy’ call on NTPC for a target price of Rs 200 apiece. “NTPC is a play on thermal demand and transitioning towards RE, aided by the advantages of its size and profitability,” the brokerage said in its report.

NTPC share price history

On a year-to-date (YTD) basis, NTPC stock has risen over 3 per cent as compared to Nifty50’s decline of 0.32 per cent. On a six-month basis, the stock gained over 4 per cent against Nifty50’s rise of over 0.07 per cent.

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