NTPC in a sweet spot; likely to be poised for leadership in renewables

Improving power demand, new capacity additions, high visibility over coal supply and electricity pricing, and attractive dividend yield augur well

There’s a straightforward relationship between economic activity and power consumption. If economic activity increases, so does power consumption. Since the latest GDP (gross domestic product) data indicates India’s growth rates exceeded expectations in the second half if the 2022-23 financial year (H2FY23) and GDP estimates of FY24 are strong, we would expect power consumption to rise as indeed it has.

There is also a direct relationship between power consumption and National Thermal Power Corporation or NTPC’s results since the public sector undertaking (PSU) is the largest power generator in India. The firm reported a strong performance in FY23.

In Q4FY23,