NTPC shares have corrected nearly 19% from its record high level of ₹448.45, which the stock had hit in September this year.
In its note, Bernstein highlighted that the core investment thesis is supported by rising power demand, evening energy shortages, and NTPC’s advantage in cost of debt.
The foreign brokerage firm mentioned that while there may not be significant drivers for further upside, there is little reason to expect a downside either.
NTPC shares are currently trading at 16 times FY25 earnings and 10 times enterprise value-to-EBITDA, which is in-line with global industry peers.
NTPC’s wholly-owned subsidiary, NTPC Green Energy will list on the bourses on November 27.
Kotak Institutional Equities in an earlier note had said that investors looking for a green and growing portfolio will directly have access to NTPC Green; this may accordingly warrant a lower valuation for NTPC.
The brokerage stated that NTPC (parent) on its own will have investment allocation just for the coal business, and accordingly, higher free cash flows for lower growth opportunities.
Kotak had maintained a ‘Sell’ rating on the counter, with a price target of ₹300 per share.
NTPC shares ended 2.61% higher at ₹365.45 on Friday. The stock has gained over 40% in the last 12 months.
