How are energy investors positioned?
Investing.com - CLSA has reiterated an Outperform rating on NTPC Ltd (NSE:NTPC) with a price target of INR459.00, citing the company’s robust performance despite challenging market conditions.
The power generation company reported a 5% year-over-year increase in first-quarter fiscal 2026 profit after tax, even as India’s overall power demand fell 4% and NTPC’s own generation declined 7% compared to the same period last year.
NTPC’s growth was driven by a 4% year-over-year increase in parent regulated equity, a 35% reduction in under-recoveries, and a 63 basis point improvement in coal plant availability factor, supported by the favorable FY25-29 regulatory regime for energy security.
The company has announced an ambitious US$31 billion capital expenditure plan for fiscal years 2026-2028, representing a 2.4-fold increase from previous levels. This expansion includes 17.5 gigawatts of regulated capacity and 14.4 gigawatts of non-fossil energy projects.
CLSA expects NTPC’s profit growth to drive a 230 basis point increase in return on equity over fiscal years 2025-2027, with continued stock rerating potential as the company leads India’s energy transition while maintaining its focus on energy security.
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