INSUBCONTINENT EXCLUSIVE:
Edelweiss has a buy rating on NTPC with a target price of Rs 145
According to the brokerage, the acquisitions give NTPC a toehold in renewables with 5GW of capacity (3GW operational), thereby skirting
The acquisitions are 10 per cent costlier than the brokerage expectations but are still value-accretive
NTPC is back on the growth trajectory (17per cent EPS growth in FY20), and this is expected to sustain
There are no more divestment risk overhangs on the company
The last traded price is Rs 80.60
NTPC, incorporated in 1975, has a market cap of Rs 82174.30 crore
Investment Rationale At a combined valuation of Rs 115 billion, the deal is 3 per cent EPS-accretive on FY21 earnings (without taking into
The valuation on FY19 P/BV (price to book value) at 0.9 times looks a tad expensive, but there is great scope to improve the earnings over
Taking a long-term view stretching to FY23/24, NTPC can add Rs 16 billion-plus to its earnings (15per cent RoE), which is significantly
NTPC is trading at an attractive P/BV and P/E of 0.7 times /6 times FY21E
FinancialsFor the quarter ended December 31, 2019, the company reported consolidated sales of Rs 25412.39 crore, up 3.89 per cent from last
quarter sales of Rs 24459.70 crore and down - 0.31 per cent from last year's same quarter sales of Rs 25491.04 crore
The company reported net profit after tax of Rs 3113.61 crore in the latest quarter.