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Decent Q1, Capacity Additions in Focus

Consensus Vs. Actual for Q1FY26: Revenue - MISS; EBITDA - MISS; PAT - BEAT Change in Estimates post Q1FY26 FY26E/FY27E: Revenue: 0%/0%, EBITDA: 0%/0%, PAT: 0/0%

Recommendation Rationale

• Q1FY26 PAT ahead of estimates: The Company’s PAT stood at Rs 6,108 Cr, up 11% YoY but down 23% QoQ, beating our and consensus estimates by 13%. PAT adjusted for regulatory deferral movement stood at Rs 4,101 Cr. However, the consolidated revenue and EBITDA missed our and consensus estimates, led by lower power generation.

• Power Generation: During Q1FY26, the company’s gross power generation stood at 91.3 BU, down 7%/4% YoY/QoQ. The Coal and Gas PLFs for Q1FY26 stood at 75.2% and 11.1% respectively (81.24% and 2.14% in Q4FY25). The lower coal PLF was due to grid restrictions. Solar PLF was at 26.81%, up from 24.54% in Q4FY25 and 23.80% in Q1FY25.

• Total capacity addition: NTPC group’s installed capacity grew by 2,716 MW to 82,646 MW in Q1FY26, led by 1,320 MW of thermal capacity addition, 996 MW of solar capacity addition, 150 MW of wind capacity and 250 MW of Hydro PSP additions. The thermal capacity additions include 660 MW of the Northkaranpura project and 660 Barh – 1 project. For FY26, the company targets 3.6 GW of thermal capacity addition and 6.5 GW of RE capacity addition.

• Underconstruction and Pipeline Capacity: As at 30th Jun’25, the company’s under construction capacity stood at 30,853 MW vs 33,750 MW in Q4FY25. The under-construction portfolio includes 15,580 MW of thermal capacity, 13,268 MW of RE capacity, and 2,005 MW of Hydro capacity.

Sector Outlook: Positive

Company Outlook & Guidance: The company has a capex plan of ~2.65 Lc Cr at the group level over FY26-28 (Rs 87,661 Cr at the standalone level). This will drive the growth in the regulated equity. Due to its strong vendor network and management, it expects lower execution risk in setting up thermal projects. The captive coal production target for FY26 is 45 MT, and it aims to produce 56 MT in FY27 and 60 MT by FY28.

Current Valuation: We value NTPC using SoTP with the thermal business at 2.1x P/BV on FY27 consolidated regulated equity, RE business at CMP (NGEL) after accounting for the 90% stake and considering a 25% Holdco discount, PSP optionality at Rs 23/share, CWIP and cash at 1x P/BV of FY25.

Current TP: Rs 400/share (Unchanged)

Recommendation: We maintain our BUY rating on the stock.

Financial Performance: Net sales stood at Rs 47,065 Cr, down 3%/6% YoY/QoQ, missing our and consensus estimates by 6% and 4% respectively. EBITDA stood at Rs 12,580 Cr, down 10%/15% YoY/QoQ, missing our and consensus estimates by 15% and 12% respectively. EBITDA margin was 26.7%, down 216bps/288bps YoY/QoQ.PAT stood at Rs 6,108 Cr, up 11% YoY but down 23% QoQ, beating our and consensus estimates by 13%. PAT adjusted for regulatory deferral movement stood at Rs 4,101 Cr.

Outlook

NTPC’s robust thermal assets provide cash flow visibility. NGEL will unlock the RE business value with its aggressive RE capacity addition targets. We believe NTPC is a good portfolio bet given its stable dividend yield, and a further rerating potential cannot be ruled out if the peak deficits increase in future. The company’s FY26/27 target thermal capacity addition at the group level is 3.58/1.46 GW. It will award 4/4.8/1.6 GW of thermal capacity in FY26/27/28 respectively. It also has a target to add ~6.5 GW of RE capacity in FY26 along with its subsidiaries. FY27 and onwards, it will target 8 GW RE addition per annum. (As per the Q4FY25 Concall)

Valuation & Recommendation

We maintain our BUY rating on NTPC. We value NTPC using SoTP with the thermal business at 2.1x P/BV on FY27 consolidated regulated equity, RE business at CMP (NGEL) after accounting for the 90% stake and considering a 25% Holdco discount, PSP optionality at Rs 23/share, CWIP and cash at 1x P/BV of FY25. Our Mar’26 TP of Rs 400/share indicates a potential upside of 20% from the CMP

Key Highlights

• Regulated equity: Standalone regulated equity for the power and mining business as of Q1FY26 stands at Rs 92,344 Cr, up 4% YoY and the consolidated regulated equity is at Rs 1,11,393 Cr, up 7% YoY.

• Coal Supply: During Q1FY26, the company’s coal supply stood at 61.75 MMT, down 2.8% YoY and 9.3% QoQ.

• Focus on Nuclear Energy: In line with the national target of 100 GW of nuclear capacity by 2047, NTPC has an ambitious target to develop 30 GW of nuclear projects. The government has approved ASHVINI, a JV to build, own and operate nuclear power plants. Further, the company is also in the process of executing Mahi Banswara Rajasthan Atomic Power Projects comprising 4x700 MW reactors for which Siting and EC were obtained in May’25. The company incorporated NTPC Pramanu Urja Nigam Limited as a wholly owned subsidiary to explore advanced nuclear technologies, including pressurised water reactors, small modular reactors and fast breeding reactors. The company has identified potential sites across states like UP, MP, Chhattisgarh, Gujarat, and others, with MOUs already signed with the Madhya Pradesh and Chhattisgarh governments.

• Energy Storage: The company, along with its subsidiaries, has ~21.24 GW of pumped storage projects (PSP) portfolio, and the first 500 MW (at Tehri PSP) has achieved COD in Jul’25 and another 500 MW is expected to be commissioned in FY26, and it will add 3 to 5 GW more by FY32. The company has already completed preliminary feasibility reports for 18 projects, and detailed project reports for 4 projects are in an advanced stage.

Key Risks to Our Estimates and TP

• Delays in commissioning of the Thermal and RE capacity.

• Financial position of Discom. NTPC’s trade receivables are dependent on the timely payment from state Discoms

• Lower Thermal Power Plant PLF and PAF.

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