NTPC Ltd - "Size matters" - Microsec

NTPC, a government-owned enterprise (Government of India's stake at 75%), is India's largest power generator, with operational thermal capacity of 39.7GW. It is responsible for 17.75% of the national capacity and contributes to 27.40% of all power generation. NTPC is planning to commission 14GW of projects under the 12th Plan vs. 9.7GW added under the 11th Plan.

NTPC is one of the safest bets in the power utility space given the company's dominant position in electricity generation, better fuel supply arrangements (FSAs) and robust power purchase agreements (PPAs). We expect it to add 14GW of capacity - an average of 3.3GW/year v/s historic average of 1.5-2GW/year.



Unlike the past, we believe execution issues will no longer hinder the stock performance. The current market price is not taking cognizance of the growth in capacity and regulated nature of the business.

We are initiating coverage on the stock with a "STRONG BUY" rating and a target price of INR 182.

Source : Equity Bulls

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