Citi initiates ‘Buy’ on 4 utility giants – NTPC named ‘top pick’ amid India’s power capex push

At the same time, Citi cautioned that execution delays, weak demand trends and regulatory risks remain key challenges across the sector. The brokerage also said valuations in the broader utility space are no longer “broadly cheap”, making balance-sheet quality and project execution increasingly important.

Citi on NTPC: ‘Buy’

Citi initiated coverage on NTPC with a ‘Buy’ rating and a target price of Rs 485, implying 22% upside from current levels. The brokerage called NTPC its top pick in the sector and said the company remains well positioned across thermal, renewables, storage and nuclear opportunities.

The brokerage said NTPC’s regulated business continues to expand with a project pipeline materially larger than the previous decade. Citi noted that the company currently has more than 30 gigawatts under construction, including 16.5 gigawatts of coal-based capacity. The report added that NTPC’s brownfield-heavy expansion strategy reduces execution risks linked to land acquisition, approvals and connectivity.

Citi also pointed to NTPC’s growing investments in renewables, storage, mining and nuclear power. According to the brokerage, these businesses are extending the company’s long-term asset profile beyond traditional thermal generation. The report said NTPC plans to achieve total installed capacity of 244 gigawatts by 2037, backed by cumulative group capital expenditure of nearly Rs 7 lakh crore by FY32.

“The duration and diversity of its regulated business look set to extend meaningfully as it transitions from a regulated coal generator into an integrated energy platform,” Citi said in its report.

The brokerage also highlighted NTPC’s advantage in funding large projects because of its scale and sovereign backing. Citi said the company’s regulated structure and pass-through cost mechanism give the stock a defensive earnings profile even if power demand weakens temporarily.

“Stronger power demand can catalyse faster incremental thermal capacity awards and reduce risk of commissioning delays,” Citi said.

Citi on Tata Power: ‘Buy’

Citi initiated coverage on Tata Power with a ‘Buy’ rating and a target price of Rs 525, implying 19% upside. The brokerage said Tata Power is undergoing a multi-year transition, with a growing share of lower-volatility businesses such as transmission, distribution and renewables.

The brokerage said Tata Power’s transmission and distribution and renewable energy businesses now contribute more than 60% of consolidated EBITDA. Citi also pointed to Odisha distribution operations as a long-term regulated equity growth engine over the next five years.

According to Citi, Tata Power remains one of the biggest beneficiaries of future electricity distribution reforms and rooftop solar adoption. The brokerage said the company has strengthened its renewable positioning through captive cell and module manufacturing facilities with industry-leading yields. The report also noted that the overhang related to Mundra has “largely resolved”, though supplementary power purchase agreements with some states remain pending.

“Multi-year transition, with a growing share of lower-volatility businesses as capex stays focused on T&D and renewables,” Citi said while explaining its ‘Buy’ rating on the stock.

The brokerage added that Tata Power’s stronger balance sheet and operational delivery justify a premium to its historical valuations. Citi also said the company remains well placed to participate in future opportunities linked to pumped storage projects, nuclear partnerships and power distribution privatisation.

Citi on Power Grid Corporation: ‘Buy’

Citi initiated coverage on Power Grid Corporation of India with a ‘Buy’ rating and assigned a target price of Rs 380, implying 19% upside. The brokerage said the company stands out as a direct beneficiary of India’s transmission grid expansion cycle.

The report highlighted that Power Grid Corporation currently has works-in-hand worth Rs 1.48 lakh crore, nearly three times the level seen at the end of FY23. Citi estimated that India’s transmission and distribution capital expenditure opportunity could reach nearly Rs 7.3 lakh crore between FY27 and FY36.

According to Citi, Power Grid Corporation is targeting nearly 50% market share of the upcoming transmission pipeline. The brokerage also said the company’s commissioning and capital expenditure trajectory has improved meaningfully after a long period of underinvestment in the grid network.

“Direct beneficiary of transmission grid buildout in India. Commissioning and capex trajectories have improved,” Citi said in its report.

The brokerage estimated that Power Grid Corporation could see a major jump in annual capital expenditure intensity over the next decade compared with historical levels. Citi added that the company remains one of the better long-term execution stories in the Indian utility space because of its regulated earnings profile and strong project pipeline visibility.

Citi on JSW Energy: ‘Buy’

Citi initiated coverage on JSW Energy with a ‘Buy’ rating and a target price of Rs 650, implying nearly 16% upside. The brokerage said the company is well positioned to benefit from both thermal and renewable power expansion.

The brokerage highlighted that JSW Energy’s long-term power purchase agreement-linked capacity could rise to 27.5 gigawatts from 13.3 gigawatts operational as of December 2025. Citi also noted that nearly 95% of the company’s earnings are expected to remain contracted, reducing exposure to merchant power volatility.

According to the brokerage, JSW Energy has added around 2.5 gigawatts of thermal capacity through acquisitions over the past four years and continues to scale up renewable operations. Citi also said the company is targeting net debt-to-EBITDA of around five times by 2030 while ensuring that new projects meet mid-teen equity internal rate of return thresholds.

“Well placed to benefit from both thermal and renewable buildout,” Citi said while initiating coverage on the stock.

The brokerage added that steady renewable additions, thermal commissioning and deleveraging after FY30 could support the company’s earnings trajectory over the medium term.

Conclusion

Citi’s latest utility-sector calls showed a preference for companies tied to India’s expanding electricity infrastructure cycle. The brokerage remained constructive on businesses linked to thermal power, renewables, transmission and storage, while cautioning that execution risks and valuation comfort will remain key factors across the sector.

Disclaimer: Investment analysis and target prices featured in this report are based on brokerage research and do not constitute an offer or solicitation for the purchase or disposal of any financial instrument. Equity investments are subject to market risks; please consult a SEBI-registered investment advisor before making any decision based on these projections. Past performance and brokerage targets are not indicative of future results or guaranteed returns.

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