The benefit of the bumper start of the market on Monday was also seen in the shares of government company NTPC Limited. The stock saw a rise of 3 percent during intraday. Now in such a situation, new targets have been given on the stock by brokerage Bernstein.
Global brokerage firm Bernstein has given ‘outperform’ rating to this stock. Bernstein has set a 12-month price target on the stock at ₹440 per share, which implies a potential upside of about 20% from the stock’s closing level on Friday.
NTPC shares have fallen nearly 19% from their record high of ₹448.45, which the stock touched in September this year. In his report, Bernstein said the main investment thesis is supported by rising power demand, evening energy shortages and NTPC’s cost of debt advantage.
The foreign brokerage firm said that while there may not be any significant reason for further gains, there is little expectation of a fall in the stock. NTPC shares currently trade at a multiple of 16x on FY25 earnings and 10x multiple on enterprise value-to-EBITDA, which is at par with the global industry. NTPC’s wholly owned subsidiary, NTPC Green Energy, will list on the bourse on November 27.
Kotak Institutional Equities had said in an earlier report that investors looking for a green and growing portfolio can invest directly in NTPC Green. This could lead to a possibility of lower valuation for NTPC. The brokerage firm said NTPC (the parent company) will allocate investments only towards the coal business and thus, there will be more free cash flows to offset the lower growth opportunities. Kotak had kept a price target of ₹300 per share while maintaining ‘Sell’ rating on this stock.
Shares of NTPC closed at ₹365.45 with a gain of 2.61% on Friday. The stock is up more than 40% in the last 12 months.
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