NTPC - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.8

NTPC Ltd., India’s largest power utility, continues to deliver strong operational performance with moderate valuations—but capital intensity and regulatory dependency remain constraints.

💼 Core Financials Deep Dive

Profitability

ROE: 13.6%, ROCE: 10.8% — decent efficiency metrics for a utility company with large-scale infrastructure assets.

EPS: ₹24.2 — robust, supporting investor confidence.

PAT Trend

Qtr PAT rose sharply from ₹5,063 Cr. to ₹7,611 Cr. — +23.4% growth indicates margin expansion or cost optimization.

Debt & Liquidity

Debt-to-equity: 1.36 — fairly high, typical of capital-heavy businesses; watch for interest cost management.

Dividend Yield: 2.32% — respectable, but not high enough to be a strong income play.

📊 Valuation Analysis

Metric Value Interpretation

P/E Ratio 13.8 Undervalued vs. industry PE of 41.2

P/B Ratio ~1.76 Attractive given solid asset base

PEG Ratio 1.10 Indicates moderate growth at reasonable price

Book Value ₹190 Strong tangible backing

Verdict: NTPC is undervalued relative to peers; offers a reasonable entry point for stability-focused investors.

⚙️ Business Model & Strategic Advantages

NTPC dominates India’s thermal power generation, with growing interests in renewables, hydro, and nuclear energy.

Benefits from government backing, access to low-cost capital, and long-term power purchase agreements.

Faces challenges like carbon transition risk, regulatory scrutiny, and debt funding burdens.

Competitive moat comes from its scale, integration, and execution capability across varied geographies.

📉 Technical Indicators

RSI: 42.8 — nearing oversold territory; hints at consolidation or bounce.

MACD: -0.30 — weak momentum, short-term negative crossover.

Price has dipped below DMA 50 & 200, trading near support zones.

Volume trend is steady, suggesting no panic but lack of major accumulation.

🎯 Entry Zone & Investment Guidance

Suggested Entry Range: ₹325–₹335 — just above recent support and nearing oversold levels.

Holding View

Ideal for medium- to long-term holding (2+ years).

Suited to investors seeking stable earnings, defensive allocation, and steady dividends.

Keep an eye on green energy capex, regulatory actions, and interest rate movements.

If you'd like a side-by-side comparison with Tata Power or Adani Energy to weigh the green vs thermal angles, I can tee that up for you. Let’s fine-tune your energy basket. ⚡🔋

Edit in a page