Prabhudas Lilladher (PL Capital) has reiterated its “BUY” recommendation on NTPC with a revised target price of Rs 450, implying meaningful upside from the current market price of Rs 389. The brokerage believes NTPC is entering a structurally stronger growth phase driven by aggressive renewable expansion, steady thermal execution, battery storage investments, and a long-term nuclear energy roadmap. Despite near-term pressure on quarterly operating metrics, the state-run power giant delivered resilient adjusted earnings growth in FY26 and continues to maintain one of the most stable return frameworks in the Indian utilities sector. PL Capital views NTPC as a low-volatility compounder with predictable cash flows, supported by regulated returns and a visible multi-year capacity pipeline.

PL Capital Maintains BUY Call As NTPC Expands Its Energy Empire

NTPC’s FY26 performance reinforced its status as India’s most strategically diversified power utility. The brokerage maintained its optimistic stance after the company reported adjusted standalone profit after tax of nearly Rs 195 billion for FY26, reflecting an annual growth of approximately 8.4%.

The brokerage raised its target price from Rs 423 to Rs 450 after incorporating revised valuation assumptions linked to NTPC Green Energy. According to the report, the stock continues to offer investors a rare combination of stability, visibility and long-duration infrastructure growth.

At current levels, the stock trades at roughly 1.9x FY28 estimated book value and around 16.9x FY28 projected earnings, valuations that analysts believe remain reasonable considering NTPC’s regulated earnings structure and expanding clean-energy portfolio.

FY26 Earnings Show Resilience Despite Operational Volatility

While headline quarterly operational numbers appeared soft, NTPC’s profitability remained resilient because of stronger subsidiary contributions and improved dividend income from joint ventures.

Core return ratios also improved. The report highlighted that implied core return on equity excluding other income improved to nearly 17.4% in FY26 from 16.5% a year earlier, mainly due to better plant efficiency and stronger operational discipline.

However, Q4FY26 witnessed weaker generation and lower plant load factors. Gross generation declined to 91.05 billion units from 95.2 billion units a year earlier, while coal plant load factor slipped to 76.2% versus 81.2%.

Massive Capacity Pipeline Creates Multi-Year Growth Visibility

The biggest investment argument for NTPC remains its enormous execution pipeline. The company currently has approximately 34 GW of projects under construction, including thermal, hydro and renewable assets.

PL Capital noted that NTPC plans to add nearly 10 GW annually between FY27 and FY29, with renewable energy contributing the majority of the expansion.

The renewable business is expected to emerge as the largest incremental growth engine. Management intends to add nearly 8 GW of renewable capacity annually, supported by improving power purchase agreement visibility and better transmission connectivity.

Battery Storage, Pumped Hydro And Nuclear Become Strategic Pillars

NTPC is no longer merely a thermal utility. The company is aggressively positioning itself for India’s next-generation energy transition.

Management disclosed that the company is developing:

• 5 GWh battery energy storage systems at thermal locations
• 1.3 GW battery projects across renewable assets
• 18 GW pumped storage pipeline
• Green hydrogen and green methanol initiatives
• Sustainable aviation fuel projects

One of the most important long-term developments is NTPC’s nuclear energy strategy. The company’s first nuclear project — the Mahi Banswara project with 2.8 GW capacity — has entered execution stages following regulatory approvals.

Management indicated that first concrete pouring is expected by August 2027, while the first synchronization is targeted around November 2032. Beyond that, NTPC is evaluating nearly 30 additional nuclear locations across multiple Indian states.

The brokerage believes nuclear investments could eventually become a major strategic differentiator as India attempts to build 100 GW of nuclear capacity by 2047.

Electricity Demand Tailwinds Continue To Strengthen

During the earnings call, management emphasized that India’s electricity demand cycle remains structurally strong.

Heatwaves, urbanization, industrial electrification and rising cooling requirements continue to drive record peak power demand. NTPC believes elevated demand conditions may persist well into FY27.

Importantly, thermal power continues to remain indispensable despite renewable growth. Management highlighted that baseload thermal plants remain critical for grid reliability, especially during peak consumption periods.

This dynamic works favorably for NTPC because of its diversified generation portfolio spanning thermal, hydro, renewable and emerging storage technologies.

Capex Cycle Intensifies As NTPC Targets Long-Term Dominance

NTPC continues to operate in an elevated investment cycle.

Group capital expenditure increased to nearly Rs 491 billion during FY26, compared with Rs 446 billion in FY25. Standalone capex rose to approximately Rs 285 billion.

Management indicated that almost half of its long-term investment plan until FY32 — estimated at approximately Rs 6.2 trillion — will be directed toward renewable energy development through NTPC Green Energy.

The company also expects a disciplined funding approach using an 80:20 debt-equity structure for renewable expansion.

Valuation Outlook And Investment View

PL Capital’s sum-of-the-parts valuation values the standalone business at roughly Rs 390 per share, while NTPC Green contributes an additional Rs 61 per share, taking the consolidated target price to Rs 450.

The brokerage expects NTPC’s earnings per share to rise from Rs 20.1 in FY26 to nearly Rs 23 by FY28. Dividend yields are also projected to remain healthy at around 2.5%.

For long-term investors, NTPC increasingly resembles a stable infrastructure compounder rather than a cyclical utility stock. Its regulated return model, diversified energy mix, expanding renewable platform, nuclear optionality and robust execution pipeline continue to strengthen the company’s investment profile.