⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
NTPC - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.0
| Stock Code | NTPC | Market Cap | 3,34,480 Cr. | Current Price | 345 ₹ | High / Low | 371 ₹ |
| Stock P/E | 16.6 | Book Value | 173 ₹ | Dividend Yield | 2.42 % | ROCE | 12.2 % |
| ROE | 13.6 % | Face Value | 10.0 ₹ | DMA 50 | 337 ₹ | DMA 200 | 337 ₹ |
| Chg in FII Hold | -0.16 % | Chg in DII Hold | 0.26 % | PAT Qtr | 4,987 Cr. | PAT Prev Qtr | 4,653 Cr. |
| RSI | 53.1 | MACD | 4.66 | Volume | 1,47,15,389 | Avg Vol 1Wk | 1,74,43,063 |
| Low price | 293 ₹ | High price | 371 ₹ | PEG Ratio | 2.28 | Debt to equity | 1.11 |
| 52w Index | 66.1 % | Qtr Profit Var | 5.85 % | EPS | 20.8 ₹ | Industry PE | 25.6 |
📊 Core Financials
- Revenue & Profitability: Quarterly PAT improved from 4,653 Cr. to 4,987 Cr. (+5.85%), showing steady earnings growth. EPS at 20.8 ₹ reflects strong profitability.
- Margins: ROCE at 12.2% and ROE at 13.6% are moderate, indicating decent efficiency but not industry-leading.
- Debt: Debt-to-equity ratio of 1.11 is high, reflecting capital-intensive operations typical of utilities.
- Cash Flow: Dividend yield of 2.42% provides consistent shareholder returns, supported by stable cash flows.
💹 Valuation Indicators
- P/E Ratio: 16.6 vs Industry PE of 25.6 → Undervalued compared to peers.
- P/B Ratio: Current Price (345 ₹) / Book Value (173 ₹) ≈ 1.99 → Reasonable valuation.
- PEG Ratio: 2.28 → Suggests moderate overvaluation relative to growth.
- Intrinsic Value: Current price appears below fair value, offering upside potential.
🏭 Business Model & Competitive Advantage
- NTPC is India’s largest power producer, with diversified generation capacity across thermal, hydro, solar, and wind.
- Government backing and regulated tariffs provide stability and predictable cash flows.
- Strong market share and expansion into renewables enhance long-term competitiveness.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive accumulation range between 310 ₹ – 325 ₹, closer to DMA 200 support levels.
- Long-Term Holding: Suitable for conservative investors seeking steady dividends and exposure to India’s power sector. Staggered buying recommended due to high leverage.
✅ Positive
- Quarterly PAT growth (+5.85%) shows earnings stability.
- Dividend yield of 2.42% provides consistent income.
- P/E ratio below industry average, indicating undervaluation.
- DII holding increased by 0.26%, reflecting domestic institutional support.
⚠️ Limitation
- High debt-to-equity ratio (1.11) increases financial risk.
- ROCE (12.2%) and ROE (13.6%) are moderate compared to peers.
- PEG ratio of 2.28 signals limited growth relative to valuation.
📉 Company Negative News
- FII holding decreased by 0.16%, showing reduced foreign investor confidence.
- High leverage remains a structural concern for utilities.
📈 Company Positive News
- Quarterly PAT rose from 4,653 Cr. to 4,987 Cr.
- DII inflows (+0.26%) highlight domestic institutional interest.
- Strong dividend yield supports shareholder value.
🌐 Industry
- Power sector benefits from rising electricity demand and government infrastructure push.
- Industry PE at 25.6 suggests NTPC trades at a discount, offering potential upside.
🔎 Conclusion
NTPC demonstrates strong fundamentals with steady earnings, government backing, and attractive dividend yield. Despite high leverage and moderate return ratios, the stock remains undervalued compared to peers. Investors may consider entering around 310–325 ₹ for long-term holding, with staggered buying to manage risk. The company is well-positioned to benefit from India’s growing power demand and renewable energy transition.
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