NTPC share price jumps 5%, hits fresh all time high; Axis Securities sees further upside

NTPC share price jumped 5 per cent to hit its fresh all time high in intraday trade on on Thursday, January 4. NTPC share price opened at 310.60 against its previous close of 306.25 and jumped 5 per cent to hit its fresh record high of 321.70. NTPC share price has witnessed strong gains in the last one year.

The stock has jumped 92 per cent in the last one year while in the last six months, it has gained about 65 per cent. Following robust gains of 11 per cent and 19 per cent in November and December, respectively, NTPC share price is up about 3 per cent in January so far. Brokerage firm Axis Securities believes this stock can rise even further.

Also Read: Axis has initiated coverage on the stock with a buy call, setting the target price at 345, implying a 13 per cent upside potential. "We initiate coverage on the stock with a buy rating and value the company by using a SoTP based target price of 345. We value the company’s conventional thermal business at 1.8 times P/BV (price to book value ratio) on its FY26 consolidated regulated BV.

Moreover, we value its RE (Renewable Energy) business at EV/EBITDA of 12 times on FY26 EBITDA, which is a premium multiple against the industry average of 9 10 times to account for growth tailwinds and evolving RE RTC (renewable energy round the clock) optionality," Axis said. Also Read: "NTPC is a good portfolio bet given its stable dividend yield.

However, further rerating potential is possible if the peak deficits increase in future and from value unlocking through the green energy IPO," the brokerage firm added. Axis Securities is positive about the stock mostly because of the company's healthy growth prospects. Axis pointed out that NTPC's substantial portfolio in conventional power, with a firm cost plus business model, positions it well in a growing peak power cycle.

This structure contributes to stable cash flows and will facilitate growth led by renewable energy. Also Read: "The CEA projects an incremental coal based power capacity of 47 GW by FY32, in which NTPC will capture the major chunk with its brownfield power projects. The company has nearly 10 GW of thermal capacity under construction which is expected to get commissioned by FY26.

It will be awarding a thermal capacity of 11.2 GW, which will be tendered over the next 12 months," said Axis Securities. The brokerage firm underscored that NTPC has an ambitious target of 60 GW of renewable capacity (RE) by FY32 from the current 3.3 GW. Presently, nearly 7.3 GW of RE projects are under construction and it has secured tenders and bilateral tie ups for another 10 GW of RE capacity, creating a visible pipeline of more than 20 GW in the near term.

Moreover, NTPC has also planned various new ventures to diversify from core operations into various green initiatives, such as green hydrogen, energy storage, Nuclear power, green mobility and RE RTC power which provides further growth optionality and rerating potential, Axis observed. Shares of NTPC traded 4.46 per cent higher at 319.90 around 12:15 pm.

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