Execution pick-up a big positive

Research evidence excerpt

Execution pick-up a big positive

esearch:Our estimates factor 4.8 GW addition. Management highlighted that backing down of thermal

plants during peak solar hours remains an issue. However, regulatory support ensures 55% India Power Monthly – Dec demand

technical minimum PLF to recover fixed costs. NTPC is also deploying 5 GWh of battery recovers

storage co-located with thermal plants on a cost-plus basis, which will store excess thermal

power during peak solar hours and discharge it during evening peak demand. 2032 group 2026: Demand Recovery to Drive Upside

capacity target of 149 GW could see thermal capacity rising to 88-89 GW vs 65 GW currently,

What Is Ailing Power Demand?while further 13 GW addition is planned over 2032-37.

Valuation tracks capex/capacity additionsExecution should drive upside: Our PT of Rs470 (vs Rs440 earlier) values the company at

2x consolidated PB FY28E, which is a 13% discount to the average of the last upcycle. Ex-

NGEL, implied valuation is 1.8x PB FY28E. Our estimates factor 6% power demand CAGR

in FY27E-30E. We believe thermal power plants will continue to gain importance to serve

baseload demand. Downside risks include: 1) land acquisition causing execution delays; and

2) sharp drop in power demand.

Exhibit 1 - NTPC: Financial Summary

Y/E March FY23 FY24 FY25 FY26 FY27E FY28E FY29E FY30E

Net Sales 1,713,566 1,749,907 1,855,050 1,855,144 2,062,051 2,305,355 2,575,405 2,883,987

EBITDA 459,789 485,828 551,964 509,513 669,077 723,397 788,060 861,919

EBITDA (%) 26.8 27.8 29.8 27.5 32.4 31.4 30.6 29.9

Adjusted PAT 159,335 181,002 212,289 255,805 265,759 285,527 308,203 333,759

EPS (Rs) 16.4 18.7 21.9 26.4 27.4 29.4 31.8 34.4

EPS Growth (%) 3.4 13.6 17.3 20.5 3.9 7.4 7.9 8.3

ROCE (%) 9.5 9.9 10.3 7.7 9.6 9.7 9.8 9.9