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NTPC share price gains 3% after strong Q4 result; brokerages maintain buy

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The share price of NTPC gained over three percent in early trade on Monday after the state-owned power giant posted a nearly three-fold jump in consolidated net profit for the March quarter.

NTPC share price gains 3% after strong Q4 result; brokerages maintain buy
NTPC share price gained over three percent in early trade on Monday after the state-owned power giant posted a nearly three-fold jump in consolidated net profit for the March quarter on the back of higher revenues.
The company’s consolidated net profit in Q4FY21 jumped to Rs 4,649.49 crore from Rs 1,629.86 crore in the year-ago period. Total income during the quarter rose to Rs 31,687.24 crore from Rs 31,330.25 crore, YoY.
The company’s board recommended a final dividend of Rs 3.15 per equity share for 2020-21, in addition to the interim dividend of Rs three per equity share paid in February 2021.
The board has also approved the enhancement of the borrowing limit of the company from Rs 2,00,000 crore to Rs 2,25,000 crore.
NTPC’s gross power generation in the March quarter was 77.63 billion units compared to 68.27 billion units (BU) in the same period a year ago. Its coal production during the quarter stood at 3.7 million tonnes, up from 2.6 million tonnes in the same period a year ago.
Plant load factor (PLF) or capacity utilisation of coal-based power plants also rose to 77.12 percent in the March quarter, up from 69.52 percent in the same period a year ago.
The average power tariff of the company was Rs 3.77 per unit in 2020-21 compared to Rs 3.90 per unit in 2019-20.
“NTPC emerged as a leader in solar bids with a market share of 43 percent. It set a target to reach 3GW in solar capacity by FY22, 14GW by FY24, and 60GW by FY32. Its cash flow from operations improved 25 percent as its receivables declined 12 percent YoY. NTPC doubled its dividend despite a buy-back, giving a clear message of a higher pay-out,” global brokerage CLSA said.
CLSA has a ‘buy’ rating on the stock with a target price of Rs 150 per share.
“We think the market and ESG investor will start to value NTPC’s 60GW vision, once it sees the delivery of 5GW in renewables by FY23,” it said.
Credit Suisse maintained an ‘outperform’ call and raised the target price to Rs 135 per share. It revised earnings higher by 1/3 percent.
“High renewable expectations have several challenges. Regulated return cut is a sizeable risk and is coming closer,” Credit Suisse said.
ICICI Securities maintained a ‘buy’ rating with a target price of Rs 165 per share.
“NTPC has doubled its RE capacity addition target by CY32 to 60GW and is on the right path with 1.5GW solar capacity won in the recent bids and participation in 5GW of upcoming bids. It will add >13GW RE capacity in FY22-24,” said the brokerage.
Motilal Oswal maintained a ‘buy’ call with a target of Rs 145 per share.
"Even as the company gradually scales up on its renewables journey, we expect continued capitalisation for its thermal projects to drive 12 percent growth in regulated equity over FY21–23E and improve RoEs. Receivables have significantly reduced as money from PFC–REC has come through and power demand continues to recover. The stock trades attractively at FY22E P/BV of 0.8x and dividend yield of 6 percent," the brokerage said.
At 11.20 am, the shares of NTPC were trading 1.89 percent higher at Rs 115.70 apiece on the BSE.

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CompanyPriceChng%Chng
ICICI Bank676.65 20.70 3.16
ITC212.40 5.40 2.61
Wipro599.15 14.95 2.56
SBI Life Insura1,050.45 24.45 2.38
SBI428.90 6.85 1.62
CompanyPriceChng%Chng
ICICI Bank676.65 20.85 3.18
ITC212.35 5.30 2.56
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Currency

CompanyPriceChng%Chng
Dollar-Rupee74.4000-0.0600-0.08
Euro-Rupee87.5450-0.0830-0.09
Pound-Rupee102.3880-0.0780-0.08
Rupee-100 Yen0.6730-0.0030-0.44