Power Sector PSU Stock To Buy As Recommended By Sharekhan, Trading Near 52 Week High

NTPC's Stock Performance

The share price of NTPC last traded at Rs 170.80 apiece on NSE. The stock is trading 6.64% away from its 52 week high, which is Rs 182.95 apiece, recorded on 1 November 2022. The stock's 52 week low is Rs 126.90 apiece, recorded on 7 March 2022.

The stock has given 0.71% positive return in 1 week, and 2.34% in 1 month, respectively. It gave 30.43% positive return in 1 year, 64.39% in 3 years, and 25.74% in 5 years, respectively.

Valuation - Maintain Buy on NTPC with an unchanged PT of Rs. 200

According to the brokerage, NTPC's risk-averse regulated business model provides earnings growth visibility/RoE improvement and RE expansion would drive gradual re-rating of the stock as it would allay concerns on the ESG front. Additionally, potential monetisation of its RE business could further improve shareholders' returns in the coming years. "The valuation of 1.1x its FY25E P/BV is attractive, given the steep discount of 26% to its historical average one year forward P/BV multiple of 1.4x and a healthy dividend yield of 4-5%. Hence, we maintain a Buy on NTPC with an unchanged PT of Rs. 200," the brokerage has said.

Key Risks

According to the brokerage, Lower-than-expected commercial capacity additions amid delay in projects and coal availability shortages could affect earnings. Moreover, any write-off related to dues from discoms could affect valuations.

Disclaimer

The stock has been picked from the brokerage report of Sharekhan. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.