The share price of NTPC witnessed a remarkable surge of nearly 6% during Friday’s trading session, reaching an all-time high of ₹251.50 on the BSE. This impressive upswing came on the heels of the commencement of operations at NTPC’s 800-MW power facility. Additionally, ICICI Direct Research, a prominent brokerage firm, reiterated a ‘buy’ rating for NTPC stock, setting a target price of ₹300. This target price suggests a potential upside of 24% from the closing price of ₹240 recorded on Wednesday. Notably, this positive momentum marked a turnaround for NTPC shares, which had experienced a two-day losing streak prior to Friday’s session.
The significance of this surge can be attributed to the upcoming formal dedication of the ₹6,000 crore Ramagundam facility to the nation by Prime Minister Narendra Modi on October 1. NTPC Ramagundam, a 2,600 megawatt (MW) Super thermal power station, is a unit of the National Thermal Power Corporation. It is situated in Ramagundam, Peddapalli district, Telangana, and currently stands as South India’s largest power plant.
NTPC announced the commencement of operations for Unit#1 (800 MW) of Telangana STPP, Stage-I (2×800 MW) with effect from 00:00 Hrs. of September 28, 2023. This development has elevated NTPC’s standalone and group commercial capacity to 57,838 MW and 73,824 MW, respectively.
ICICI Direct Research, in its report, highlighted NTPC’s ambitious plan to add renewable capacity totaling 16,000 MW between FY24 and FY26. This strategic move will expand the company’s green portfolio and potentially lead to a revaluation of the stock.
“We estimate EBITDA and PAT to grow at 16.1%, and 16% CAGR respectively over FY23-25E. We maintain our BUY rating on NTPC. We value the stock at ₹300 per share (based on 1.8x FY25 Book Value),” the brokerage stated in its report.
From a technical standpoint, data from Trendlyne indicates that NTPC’s stock price has surged by 55.8% in the past year, outperforming its sector by 38.8%.
Rajesh Bhosale, Equity Technical and Derivative Analyst at Angel One, emphasized that NTPC’s stock price has gained substantial momentum following a strong opening. The breakout from a recent consolidation range signifies a return to its primary upward trend. Bhosale anticipates this upward trajectory to continue in the short term, potentially reaching a target price of ₹260. Any potential decline to the range of ₹243 to ₹240 is seen as a favorable buying opportunity.
In summary, NTPC’s recent achievements, coupled with positive analyst sentiment and technical indicators, have fueled its share price to reach an all-time high, reflecting promising prospects for the company in the energy sector.
