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Investing.com - BofA Securities has upgraded NTPC Ltd (NSE:NTPC) from Underperform to Neutral with a price target of INR338.00, citing valuation contraction.
The Indian power utility’s stock has underperformed the Nifty index by 21% and other defensive sectors including IT, Pharmaceuticals, and Consumer Staples by 10-20% since August 2024, according to BofA Securities.
BofA notes that NTPC’s valuations have contracted by 30%, with the stock now trading at its long-term average valuation of 1.5x price-to-book ratio, suggesting that execution risks appear to be priced in.
The research firm had previously highlighted NTPC’s consistent execution delays across both its thermal and renewables portfolios, which resulted in the company missing its guidance targets.
These execution challenges now seem adequately reflected in the stock price, prompting BofA Securities to revise its rating while maintaining a price target of INR338.00.
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