NTPC’s Q1 FY27 earnings topped Street expectations after continued capacity additions lifted profit during the June quarter. Macquarie said the results reflect steady execution and sees further growth from annual thermal capacity additions and an expanding renewable business. The brokerage has an ‘Outperform’ rating on the stock with a 12-month target price of Rs 480, implying an upside of 40.8%.
Macquarie says stronger plant availability drove the earnings beat
Macquarie said NTPC’s June-quarter performance exceeded consensus expectations as fresh capacity additions and better operating metrics lifted profitability.
The brokerage noted that consolidated net profit increased 12% year on year, ahead of Street estimates, helped by higher generation and stronger plant availability.
As the brokerage put it, “NTPC’s Jun-Q consolidated net profit grew 12% YoY (above the consensus estimate), driven by strong capacity adds and higher plant availability.”
On a standalone basis, the coal plant availability factor (PAF) improved to around 94%, compared with 93.5% in the corresponding quarter last year and 90.1% in FY26. Standalone generation rose more than 3% year on year to 93.6 billion units (BU). Solar utilisation also improved during the quarter, although hydro generation remained subdued, the note added.
Fresh capacity additions continue to expand NTPC’s portfolio
Macquarie said NTPC commissioned 1.8 GW of new capacity during the quarter, comprising 820 MW of thermal capacity, 250 MW of hydro capacity and around 730 MW of renewable capacity.
The additions increased the group’s installed capacity to 90.9 GW, while projects under construction stood at 35.7 GW.
The brokerage said the continued pace of project commissioning should steadily expand NTPC’s regulated asset base and support earnings growth over the coming years.
Long runway for thermal and renewable businesses
While renewable energy remains a major growth area, Macquarie believes NTPC’s thermal portfolio still has considerable room to expand.
The brokerage said, “For NTPC, we see a long growth runway for the thermal portfolio (roughly 2GW of annual addition) as well as significant capacity additions in renewables by FY32E (guidance: 60GW by 2032). Sustained higher overall power demand (as seen in 1Q FY27) should provide impetus to incremental commissioning, we believe.”
Macquarie expects NTPC to continue adding around 2 GW of thermal capacity every year while pursuing its target of commissioning 60 GW of renewable capacity by 2032.
The brokerage said stronger electricity demand, evident during the June quarter, should continue supporting new project commissioning across both conventional and renewable businesses.
NTPC: Regulated equity continues to expand
Macquarie said NTPC’s regulated business continued to strengthen during the quarter, with consolidated regulated equity increasing around 9% year on year.
The brokerage believes the growing regulated asset base provides a stable earnings foundation as additional projects become operational over the next few years.
Operational momentum reflects in quarterly financials
Macquarie highlighted broad-based improvement across NTPC’s financial performance.
Recurring revenue increased to Rs 490.3 billion from Rs 462.1 billion a year earlier.
EBITDA rose 9% year on year to Rs 150.4 billion, while EBIT increased 7% to Rs 98 billion.
Reported net profit climbed to Rs 67.2 billion from Rs 60.1 billion in the corresponding quarter last year.
The brokerage attributed the stronger performance primarily to improved operating metrics rather than non-recurring gains.
Macquarie retains ‘Outperform’ on NTPC
Macquarie reiterated its ‘Outperform’ rating on NTPC and maintained its 12-month target price of Rs 480, compared with the reference price of Rs 347.15.
The brokerage values NTPC using a sum-of-the-parts (SOTP) methodology, assigning a 2.25x price-to-book multiple to the regulated business while valuing NTPC Green at market value.
Macquarie said it continues to prefer NTPC because of the steady expansion of its regulated asset base and the company’s long-term opportunities across multiple non-thermal businesses.
Conclusion
Macquarie believes NTPC’s June-quarter performance reinforces the strength of its regulated business model. Higher plant availability, steady capacity additions and continued expansion of regulated equity helped the company deliver earnings ahead of expectations, while its thermal expansion pipeline and renewable growth plans provide visibility on future earnings. Those factors underpin the brokerage’s ‘Outperform’ rating and Rs 480 target price.
Disclaimer: This article is for informational and educational purposes only and reports on third-party brokerage coverage and analyst price targets. The views, estimates, and price targets mentioned are those of Macquarie and do not constitute direct investment advice, a endorsement, or a solicitation to buy or sell NTPC shares. Equities carry market risks, and past performance or target prices are not guarantees of future returns. Readers should conduct independent research and consult a SEBI-registered financial advisor before making any investment decisions.
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