NTPCGREEN - Fundamental Analysis: Financial Health & Valuation

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

Fundamental Rating: 3.6

📊 Core Financials Overview

Profitability

PAT declined from ₹205 Cr to ₹165 Cr — a –19.5% drop, though YoY growth remains positive at 26.3%.

EPS: ₹0.63 — low, reflecting early-stage operations and high capex.

Return Metrics

ROCE: 6.42% and ROE: 3.95% — modest, typical for capital-heavy renewable infrastructure.

Debt Profile

Debt-to-equity: 0.44 — moderate leverage, manageable given long-term PPAs and government backing.

Cash Flow: Not disclosed, but consistent profits and regulated revenue suggest stable operating cash flows.

💹 Valuation Indicators

Metric Value Commentary

P/E Ratio 167 Extremely high — reflects speculative premium and future growth expectations.

P/B Ratio ~4.75 Elevated — suggests market pricing in long-term potential.

PEG Ratio Not available Lack of consistent earnings growth makes PEG unreliable.

Intrinsic Value ~₹85.2

1

Current price of ₹104 is ~19% above intrinsic value — overvalued in base case.

🧠 Business Model & Competitive Advantage

NTPC Green Energy Ltd. (NTPCGREEN) is the renewable energy arm of NTPC Ltd., India’s largest power producer

Core Operations

Develops, constructs, and operates solar and wind energy projects.

Operates under long-term Power Purchase Agreements (PPAs) — ensures predictable revenue.

Scale & Reach

Largest renewable PSU in India (excluding hydro)

2

.

Targeting 60 GW renewable capacity by 2032 — aggressive expansion plan.

Strategic Projects

Recently commissioned 400 MW out of a 500 MW solar plant

2

.

Active in joint ventures with ONGC and Ayana Renewable Power.

Operational Efficiency

Debtor days reduced from 306 to 85.3 — major improvement in cash cycle

2

.

Challenges

Low interest coverage ratio and weak ROE.

No dividend payout despite profitability — reinvestment-focused strategy.

Its competitive edge lies in government support, scale, and long-term PPAs, but profitability and valuation remain concerns.

📈 Technical & Sentiment Signals

RSI: 49.6 — neutral zone, no strong momentum.

MACD: Slightly negative — mild bearish crossover.

Volume: Below weekly average — suggests cooling speculative interest.

DMA 50/200: Price below both — short-term weakness.

🎯 Entry Zone & Long-Term Guidance

Suggested Entry Zone: ₹85–₹95 — near intrinsic value and technical support.

Long-Term View: NTPCGREEN is a strategic clean energy play with strong backing and ambitious growth targets. Suitable for long-term holding if you're comfortable with high valuation and low current returns. Dividend yield is nil, so returns depend entirely on capital appreciation.

You can explore NTPCGREEN’s business model and strategic framework

3

or its intrinsic valuation breakdown

1

for deeper insights. Let me know if you'd like a comparison with Adani Green or SJVN Green.

1

www.alphaspread.com

2

www.screener.in

3

www.businessupturn.com

Edit in a page