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Good year with strong execution pipeline

NTPC delivered a healthy FY26 performance with standalone adjusted PAT at INR195bn, up 8% YoY, supported by a 4% increase in regulated equity and improvement in coal plant PAF by 20bps to 90.1% in FY26. Core profitability remained strong with implied FY26 core RoE (excluding other income) improving to 17.4% versus 16.5% YoY (led by better plant efficiency). Looking ahead, NTPC has reiterated an annual capacity addition target of ~10GW across FY27E–FY29E, with NGEL targeting ~8GW annually, while the consolidated under-construction pipeline remains robust at 34GW vs 33GW QoQ. The company also indicated an evolving nuclear investment strategy, targeting ~30% contribution toward the Ministry of Power’s 100GW nuclear ambition by 2047. Overall, NTPC’s regulated cost-plus model continues to provide stable RoE, predictable cash flows and low earnings volatility, reinforcing its positioning as a low-risk compounder rather than a high-growth story. Stock trades at 1.9x FY28E BV (EPS CAGR expected at 7% over FY26-28E) and we maintain BUY with a FY28E TP of INR450/share (earlier INR423 as we factored CMP of NGEL in revised TP) based on SoTP valuation, along with ~2.5% dividend yield support (DPS of INR 9 in FY26)

Adj PAT above estimates:

For FY26, adj PAT increased ~8% YoY,was above our and consensus estimates, supported by improved subsidiary contributions and higher dividend income from JVs. In Q4FY26 gross generation stood at 91.05 BU’s vs. 95.2 BU’s YoY, Coal PLF stood at 76.2% vs. 81.2 % YoY, Domestic fuel consumption for the quarter stood at 52.1 MMT vs 68.1 MMT YoY. Company declared final dividend of INR 3.5 per share with this total dividend for the year stood at INR 9 per share with dividend payout ratio of 45% for the year.

Capacity pipeline underpins medium-term growth visibility:

NTPC maintains a strong execution pipeline with 34 GW under construction, comprising 16.5 GW thermal, 2.6 GW hydro, and 15 GW renewables, supporting robust medium-term growth. The company plans 9.6 GW capacity addition in FY27 and 10 GW in FY28, with renewables forming the bulk (8 GW annually), aligned with its target of 60 GW RE capacity by 2032. Thermal additions over the next few years remain focused (1–1.5 GW annually), largely through brownfield expansions, limiting execution risks. On the green side, NTPC continues to scale aggressively with 8 GW annual RE additions, supported by improving PPA visibility (70– 75% tied up) and rising transmission connectivity. Additionally, the company is expanding into energy storage (5 GWh BESS at thermal sites and 1.3 GW battery projects in renewables, with 4 GW pipeline) and pumped storage (18 GW group pipeline), positioning itself as a key grid-balancing player alongside its diversified generation growth.

Nuclear addition plans:

Nuclear: Building long-term optionality with measured execution NTPC is gradually building its nuclear portfolio as part of its long-term diversification strategy, with nuclear expected to become an important growth pillar alongside thermal, renewables and storage. The company’s first nuclear project, Mahi Banswara (4×700MW; ~2.8GW), has moved into execution with excavation consent received from AERB and key clearances already in place. Management indicated first concrete pour is targeted by Aug’27, with synchronization of the first unit planned by Nov’32 and subsequent units expected at six-month intervals. Beyond Mahi Banswara, NTPC is evaluating ~30 potential locations across India and has initiated discussions and preliminary studies with multiple states including MP, Chhattisgarh, Andhra Pradesh, Gujarat, Odisha, UP, Bihar and Maharashtra. While execution remains at an early stage, NTPC indicated an ambition to contribute meaningfully toward India’s long-term nuclear capacity buildout, positioning nuclear as a strategic growth lever over the next two decades while retaining a measured capital allocation approach.

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