NTPC market cap touches Rs 3 trillion; zooms 88% thus far in CY 2023

NTPC, the state-owned power generation company, joined the elite group of listed companies having market capitalsation (market cap) of Rs 3 trillion after its stock hit a new peak of Rs 312.45, up 3 per cent on the BSE in Tuesday's intraday trade. 

Thus far in the calendar year, the stock price of NTPC has zoomed 88 per cent as compared to 16.7 per cent rally in the S&P BSE Sensex. At 01:27 PM, with a market cap of Rs 3.02 trillion, NTPC stood at 20th position in the overall ranking among the BSE listed companies, the exchange data shows.

NTPC is India's largest power generation company with a total installed capacity of ~73000 MW at the group level as of FY23. The company has 17 per cent of total installed capacity in India with 24 per cent generation share. NTPC's vision is to become a over 130 GW company by 2032 of which 60 GW would be contributed by renewable energy.

NTPC added 110MW of renewable capacity in H1FY24 (April to September) and its installed generation capacity now stands at 73.8GW, of which renewable and hydro power account for 3.4GW and 3.7GW, respectively. The company plans to commission 20GW of renewable capacity by FY27 and an additional 40GW by FY32.

Going ahead, NTPC's FY24 capex is targeted at Rs 28,400 crore and Rs 22,500 crore on consolidated and standalone basis, respectively, of which around 47 per cent has been completed in the first half. Additionally, the company has identified 14GW of pumped hydro capacity to be commissioned over 6-9 years.

"NTPC has set out an aggressive renewable capacity addition plan to the tune of 16,000 MW over FY24-FY26, which will scale up the green portfolio of the company, and lead to re-rating of the stock. Per year addition of 4,000-5,000 MW of renewable capacity and strong growth in regulated equity in the conventional thermal portfolio," according to analysts at ICICI Securities. 

The stock achieved the brokerage's 12-month target price of Rs 300, which was set in September 2023.

Meanwhile, NTPC has been accorded the Maharatna status, and accounts for nearly a fourth of the power generated in the country.

As part of its divestment plan, Government of India (GoI) has pared its shareholding in NTPC over the past several years. However, the government remains the majority shareholder with 51.1 per cent as on September 30, 2023. It will continue to provide need-based financial support, through guarantees, for foreign currency borrowing.

NTPC is one of the few in the industry which has already committed capex for pollution control equipment for Sox and Nox and is expecting to commission FDG across 60,000 MW of coal-based capacity with an estimated capitalisation of Rs 30,000 crore.

"Apart from the projects under construction, the company also has plans to add brownfield coal-based capacities to the tune of 7000 MW which will come up in phases by 2030 and the ordering for same will take place by FY25. The under-construction projects and under pipeline projects will further increase the market share of NTPC in the coal-based power plant segment which currently stands at 17 per cent as of FY23," ICICI Securities had said in its report.

Those at  BOB Capital Markets had said in the September quarter result update that NTPC is among the key players powering India's economy given its robust thermal portfolio. Considering a thrust on renewables and simultaneous enhancement of thermal capacity, the brokerage believes the company is well positioned in the power generation space. The stock, however, is trading above its target price of Rs 290 per share.