NTPC - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.1
| Stock Code | NTPC | Market Cap | 3,87,042 Cr. | Current Price | 399 ₹ | High / Low | 414 ₹ |
| Stock P/E | 19.2 | Book Value | 173 ₹ | Dividend Yield | 2.09 % | ROCE | 12.2 % |
| ROE | 13.6 % | Face Value | 10.0 ₹ | DMA 50 | 381 ₹ | DMA 200 | 357 ₹ |
| Chg in FII Hold | 0.30 % | Chg in DII Hold | -0.06 % | PAT Qtr | 4,987 Cr. | PAT Prev Qtr | 4,653 Cr. |
| RSI | 58.3 | MACD | 7.84 | Volume | 82,06,773 | Avg Vol 1Wk | 1,05,43,713 |
| Low price | 316 ₹ | High price | 414 ₹ | PEG Ratio | 2.64 | Debt to equity | 1.11 |
| 52w Index | 84.6 % | Qtr Profit Var | 5.85 % | EPS | 20.8 ₹ | Industry PE | 31.0 |
📊 Financials: NTPC demonstrates solid fundamentals with ROE at 13.6% and ROCE at 12.2%. EPS is strong at ₹20.8, supported by quarterly PAT growth (+5.85%, ₹4,987 Cr vs ₹4,653 Cr). Debt-to-equity ratio of 1.11 is relatively high, reflecting leverage risk, but manageable given stable earnings. Dividend yield of 2.09% provides steady income support.
💹 Valuation: The stock trades at a P/E of 19.2, below the industry average of 31.0, suggesting undervaluation. PEG ratio of 2.64 indicates moderate growth alignment but not deeply attractive. Book value of ₹173 provides strong intrinsic backing. Overall, valuation remains favorable compared to peers.
🏭 Business Model: NTPC is India’s largest power producer, with strengths in scale, diversified generation mix, and government backing. Its competitive advantage lies in consistent earnings, dividend payouts, and infrastructure demand. However, high leverage and sector cyclicality remain challenges.
📈 Entry Zone: Attractive entry would be near ₹380–₹385, aligning with support levels and fair valuation. Current price (₹399) is above both 50 DMA (₹381) and 200 DMA (₹357), suggesting bullish momentum. Long-term investors may accumulate gradually, with focus on sustained earnings growth and debt management.
Positive
- Strong EPS of ₹20.8.
- Quarterly PAT growth (+5.85%).
- Dividend yield of 2.09% provides steady returns.
- FII holdings increased (+0.30%), showing foreign investor confidence.
Limitation
- High debt-to-equity ratio (1.11).
- ROCE (12.2%) remains moderate compared to peers.
- DII holdings declined (-0.06%), showing reduced domestic support.
Company Negative News
- High leverage remains a structural risk.
- DII holdings declined (-0.06%).
Company Positive News
- Quarterly PAT improved to ₹4,987 Cr (+5.85%).
- FII holdings increased (+0.30%).
- Strong dividend payouts and government backing.
Industry
- Power sector remains cyclical but supported by infrastructure demand.
- Industry P/E at 31.0 highlights NTPC’s undervaluation.
- Energy transition and renewable integration impact long-term strategy.
Conclusion
⚖️ NTPC demonstrates strong fundamentals with stable earnings, attractive valuation, and consistent dividends. Entry is favorable near ₹380–₹385 for long-term investors. Current levels suggest bullish momentum, making cautious accumulation viable. Holding is recommended for dividend stability and long-term growth, with monitoring of debt levels and sector cyclicality.