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market | IST

Moneycontrol Pro: NTPC stock in focus, here’s why

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NTPC is a defensive player and is trading at an attractive valuation. Recently, it corrected from nearly Rs 150 per share to about Rs 135 at present.

In a few ideas for profit from Moneycontrol Pro, Jitendra Gupta of Moneycontrol.com spoke about a share that he is tracking closely, NTPC.
NTPC is a defensive player and is trading at an attractive valuation. Recently, it corrected from nearly Rs 150 per share to about Rs 135 at present.
It is now trading seven times its fiscal 2023 estimated earnings and 0.9 times its book value. Moreover at the current levels, it offers a dividend yield of close to 5 percent. Apart from valuation, the state-run company's fundamentals are also improving for the current quarter.
In the previous quarter ended September 2021, the company reported a 10.5 percent year-on-year increase in power generation. This, along with the better performance of JVs and subsidiaries, helped the company post nearly a 17 percent increase in consolidated revenue.
Moreover, the company has great earnings visibility today. In fact, in the first half of the current fiscal, the company commercialised close to 2,160 megawatts of capacity, and it intends to install close to 5,000 megawatts of thermal and 1,100 megawatts of renewable capacity by the end of fiscal 2022.
The new capacity addition and the higher demand will, of course, help in growing the top line. Profitability should be even better on the back of lower taxes, higher surcharges and incentives, and particularly contribution from subsidiaries and JVs.
Overall, it's a good play from the earnings and valuation perspective.
Watch the accompanying video for more.
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