NTPC - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.4

📊 Core Financials Overview

Profitability

PAT held steady at ₹4,775 Cr vs ₹5,778 Cr — a 5.85% variation, showing consistent earnings.

EPS: ₹20.5 — strong for its price range and sector.

Return Metrics

ROCE: 12.2% and ROE: 13.6% — solid, especially for a capital-intensive utility.

Debt Profile

Debt-to-equity: 1.15 — moderately high, typical for infrastructure-heavy PSUs.

Cash Flow: Supported by regulated tariffs and long-term PPAs, ensuring predictable inflows.

💹 Valuation Indicators

Metric Value Commentary

P/E Ratio 16.4 Undervalued vs. industry average of 31.2 — attractive entry point.

P/B Ratio ~2.02 Reasonable given strong ROE.

PEG Ratio 2.26 Slightly elevated — suggests valuation is catching up with growth.

Intrinsic Value Estimated near ₹360–₹380 Current price slightly below fair value — favorable for accumulation.

🧠 Business Model & Competitive Advantage

NTPC Ltd. is India’s largest power producer and a cornerstone of the country’s energy infrastructure

Core Operations

Generates electricity via coal, gas, hydro, solar, and wind — with over 75,000 MW installed capacity

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Sells power to state utilities under long-term Power Purchase Agreements (PPAs) — ensures stable revenue.

Regulated Tariffs

Operates under a cost-plus tariff model regulated by CERC — guarantees fixed returns on equity

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Diversification

Expanding into renewables via NTPC Green Energy Ltd — targeting 60 GW renewable capacity by 2032

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Ancillary Services

Offers consultancy, project management, and supervision services — monetizing its operational expertise

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Operational Efficiency

High Plant Load Factors (PLFs) and fuel cost optimization — ensures steady margins even in volatile markets.

Its competitive edge lies in scale, government backing, regulated returns, and renewable transition, making it a resilient long-term play.

📈 Technical & Sentiment Signals

RSI: 56.0 — neutral zone, no strong momentum.

MACD: Slightly negative — mild bearish crossover.

Volume: Near average — suggests consolidation.

DMA 50/200: Price hovering near both — trend indecisive but stable.

🎯 Entry Zone & Long-Term Guidance

Suggested Entry Zone: ₹320–₹335 — near DMA levels and below intrinsic value.

Long-Term View: NTPC is a high-quality PSU with strong fundamentals, predictable cash flows, and a strategic renewable roadmap. Ideal for long-term holding, especially for investors seeking stable returns and dividend income (2.48% yield). Its regulated model and diversification make it a defensive anchor in any portfolio.

You can explore NTPC’s business model breakdown or its financial framework and promoter details for deeper insights. Let me know if you'd like a comparison with Power Grid or NHPC.

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www.businessupturn.com

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vizologi.com

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