NTPC Share Price Overview

An in-depth look at NTPC's stock performance, financial growth, and key metrics for potential investors in the power sector

NTPC Limited, India's largest power generation company, plays a pivotal role in the country's energy sector. Whether you are an investor or just looking for insights into the company’s financial health, understanding NTPC's current performance and future prospects is essential. This article dives into the NTPC share price overview, including its market performance, pros and cons, and financial metrics to give you a clear picture of its potential.

NTPC Stock Price Overview

As of the latest data, NTPC's current share price stands at ₹370 with a market capitalization of ₹3.58 lakh crore. The stock has shown a remarkable 1-year return of 30%, reflecting strong investor confidence. Its 52-week high and low range between ₹448 and ₹281, showcasing significant volatility but also highlighting the potential for high returns in the long run.

• Stock P/E: 16.2
• Dividend Yield: 2.10%
• ROE (Return on Equity): 13.5%
• ROCE (Return on Capital Employed): 10.5%
• Face Value: ₹10

NTPC's stock performance shows strong fundamentals and a healthy yield, making it an attractive option for investors seeking stability and steady growth.

NTPC’s Financial Performance

Quarterly Performance Highlights

 

Metric	Sep 2023	Dec 2023	Mar 2024 (Proj.)	Sep 2024 (Proj.)
Sales	₹44,983 Cr.	₹42,820 Cr.	₹47,622 Cr.	₹44,696 Cr.
Expenses	₹32,303 Cr.	₹31,458 Cr.	₹33,638 Cr.	₹33,041 Cr.
Operating Profit	₹12,680 Cr.	₹11,362 Cr.	₹13,984 Cr.	₹11,655 Cr.
Operating Profit Margin	28%	27%	29%	26%
Other Income	₹1,024 Cr.	₹2,532 Cr.	₹1,406 Cr.	₹3,227 Cr.
Interest Expense	₹2,921 Cr.	₹3,250 Cr.	₹2,955 Cr.	₹3,136 Cr.
Depreciation	₹4,038 Cr.	₹4,074 Cr.	₹4,271 Cr.	₹4,204 Cr.
Profit Before Tax (PBT)	₹6,746 Cr.	₹6,571 Cr.	₹8,164 Cr.	₹7,046 Cr.
Net Profit	₹4,726 Cr.	₹5,209 Cr.	₹6,490 Cr.	₹5,380 Cr.
EPS	₹4.76	₹5.32	₹6.36	₹5.44

 

In the recent quarter (Sep 2023), NTPC reported a total sales revenue of ₹44,983 crores, reflecting a strong demand for power generation. The company has consistently shown strong operating profits, with Operating Profit Margin (OPM) reaching 29% in FY 2023. Additionally, NTPC's Net Profit for the quarter was ₹4,726 crores, showcasing a healthy growth trajectory.

Key Financial Metrics for FY 2023:

• Operating Profit: ₹13,984 Crores
• Profit Before Tax: ₹8,164 Crores
• Net Profit: ₹6,490 Crores
• EPS: ₹6.36

NTPC's stable revenue stream and profitability, even amid global economic uncertainties, highlight its robust financial health.

Growth Analysis

NTPC has shown impressive compounded growth over the years:

• 10-year compounded sales growth: 9%
• 5-year compounded sales growth: 12%
• 3-year compounded sales growth: 17%

The company’s growth is even more evident in its profit figures:

• 10-year compounded profit growth: 6%
• 5-year compounded profit growth: 7%
• 3-year compounded profit growth: 10%

Cash Flow and Investments:

• Operating Cash Flow has been robust, with ₹40,052 Cr. in FY 2023.
• Investing Cash Flow has seen significant outflows (e.g., ₹26,107 Cr. in FY 2023), as NTPC continues expanding its infrastructure, especially in renewable energy.
• Financing Cash Flow shows a net outflow in recent years, likely due to debt servicing and other financial activities.

Shareholding Pattern:

• Promoters: 51.10% (Majority ownership)
• FIIs (Foreign Institutional Investors): 17.86% (Increasing foreign interest)
• DIIs (Domestic Institutional Investors): 27.55%
• Public: 3.37%

Debt & Liabilities:

NTPC's borrowing has steadily increased over the years, with total borrowings at ₹237,131 Cr. in FY 2024, a strategic approach to fund expansion, including renewable energy projects.

 

Pros of Investing in NTPC

1.      Market Leadership and Stability:
NTPC is India's largest power generation company, commanding a dominant position in the thermal and renewable energy sectors. With a diverse portfolio of power plants, NTPC ensures stable and consistent revenue.

2.      Expanding Renewable Energy Portfolio:
As part of its strategy to contribute to India’s green energy goals, NTPC has significantly increased its renewable energy capacity. This shift towards clean energy is expected to be a major growth driver, aligning the company with global sustainability trends.

3.      Healthy Financial Performance:
NTPC has consistently demonstrated strong revenue, profit, and operating margins. With an OPM of 29% and a ROE of 13.5%, the company is highly profitable and efficient.

4.      Dividend Payout:
NTPC is a shareholder-friendly company, offering a dividend yield of 2.10%, which is attractive for income-seeking investors. The company’s ability to generate steady profits supports its regular dividend payouts, making it an appealing choice for long-term investors.

5.      Government Support:
As a Public Sector Undertaking (PSU), NTPC enjoys government backing. This gives it an edge in securing funding for projects, receiving favorable policies, and benefiting from the government's push toward enhancing India's power capacity.

Cons of Investing in NTPC

1.      High Dependence on Fossil Fuels:
Despite its efforts to diversify, NTPC remains heavily dependent on coal-based thermal power generation. This dependence exposes the company to risks related to fluctuating fuel prices and tightening environmental regulations aimed at reducing carbon emissions.

2.      Rising Debt Levels:
NTPC has seen a rise in its borrowings, reaching ₹237,131 crores in FY 2023. While these borrowings are used for expansion, particularly in renewable energy, the increasing debt levels raise concerns about the company's future interest payments and the pressure on profitability.

3.      Regulatory and Environmental Challenges:
As India moves toward achieving its climate goals, NTPC may face stricter regulations on its thermal power generation units. Additional compliance costs or operational restrictions could impact the company’s bottom line.

4.      Competition from Private and International Players:
The Indian power sector is becoming increasingly competitive, with private players like Adani Power, Tata Power, and international companies vying for market share. This could limit NTPC’s growth potential in both the thermal and renewable segments.

5.      Operational Challenges:
NTPC’s large fleet of power plants requires significant ongoing investment in maintenance and upgrades. Operational inefficiencies, coupled with rising maintenance costs, could affect profitability in the future.

6.      Capital-Intensive Growth:
The company’s ongoing investments in both thermal and renewable projects are capital-intensive. These large projects may take time to generate returns, potentially affecting short-term liquidity and growth prospects.

NTPC's Shareholding Pattern

• Promoters: 51.10%
• FIIs: 17.86%
• DIIs: 27.55%
• Public: 3.37%

NTPC's shareholding structure indicates strong institutional backing, particularly from FIIs (Foreign Institutional Investors) and DIIs (Domestic Institutional Investors), which instills confidence in the company’s future prospects.

Conclusion

NTPC remains a powerhouse in the Indian power sector, with strong growth potential in both thermal and renewable energy. Its healthy financial metrics, consistent profit growth, and expanding renewable energy portfolio make it a solid choice for long-term investors. However, challenges such as high debt levels, environmental regulations, and competition could limit its future growth.

Disclaimer:

The information provided in this article is for informational purposes only and does not constitute financial or investment advice. All data, including stock prices, financial metrics, and projections, are based on publicly available information and are subject to change without notice. Investment decisions should be based on your personal financial situation, risk tolerance, and goals. It is strongly recommended to consult with a certified financial advisor or conduct thorough research before making any investment decisions. The author and website do not accept any liability for any losses or damages arising from the use of this information

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