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Healthy Q1, plan laid out until FY37

NTPC delivered a healthy Q1FY27 performance with standalone adjusted PAT up 16% YoY, supported by a improvement in coal plant PAF by 50bps to 93.4% in Q1FY27, change in generation mix. Core profitability remained strong with implied Q1 core RoE (excluding other income) improving to 19.7% versus 16.7% YoY. In Q1FY27E NTPC has commissioned 1.8GW and has target of 10GW commissioning in FY27E. NTPC Green FY28E target of 8GW hinges on timely commissioning of transmission infra. It is also planning for 3.3GWh of BESS in FY27 to address curtailment issues in NTPC green. NTPC has laid out capex plan for capacity upto FY37E with addition CAGR of 9% / 11% over 2026-32 / 2032-37 respectively. And other key takeaways is coal share in 2026- 32 capacity addition (of 59GW) is 17% and 2032-37 (of 100GW) is 13%. It has 16GW of coal capacity in construction stage and plans for additional 7GW for its FY37E capacity addition target. Over mid-term it has annual capacity addition of ~10GW across FY27E–FY29E. Overall, Stock trades at 1.7x FY28E standalone BV and 1.5x FY28E consol BV (standalone EPS CAGR expected at 7% over FY26-28E) and we maintain BUY with a FY28E TP of INR450/share based on SoTP valuation, along with ~2.8% dividend yield support (DPS of INR 9.7 in FY27).

Beat in Adj. PAT:

Q1FY27 revenue was flat at INR 440 bn but EBITDA stood at INR 129 bn up 6% YoY supported by lower other expenses with this adj PAT increased ~16% YoY, was above our and consensus estimates, supported by improved subsidiary contributions and higher dividend income from JVs. In Q1FY27 gross generation stood at 93.64 BU’s vs. 91.32 BU’s YoY, Coal PLF stood at 76.7% vs. 75.2 % YoY, Domestic fuel consumption for the quarter stood at 47.9 MMT vs 51.3 MMT YoY.

Robust execution pipeline supports long-term growth outlook:

NTPC continues to strengthen its long-term growth outlook with 35.7 GW under construction and an additional ~12 GW under tendering, providing strong earnings visibility over the medium term. During FY27YTD, the company commissioned 1.9 GW, taking operational capacity to ~91 GW, while its total project portfolio has expanded to ~127 GW. Management has revised its long-term corporate plan, targeting 150 GW installed capacity by FY32 and 250 GW by FY37, backed by a cumulative ~INR 17 tn capex plan. Renewable energy will remain the key growth driver, supported by accelerated investments in BESS, pumped storage and transmission infrastructure. Management also highlighted that future renewable investments should be viewed as an integrated portfolio of renewables plus storage, rather than standalone GW additions, to improve grid reliability and project returns. In addition, NTPC is building a long-term nuclear pipeline with ~30 GW of potential opportunities across multiple states, further diversifying its future generation portfolio.

Building a scalable nuclear generation platform:

NTPC is steadily building its nuclear portfolio to diversify its generation mix beyond thermal and renewables. The company is progressing the 2.8 GW Mahi Banswara Nuclear Power Project (4×700 MW) while simultaneously evaluating ~30 GW of long-term nuclear opportunities across multiple states. Site identification and feasibility studies are underway across 10 states, with multiple reactor technologies under evaluation to support future capacity expansion. Nuclear power is expected to play an increasingly important role in NTPC's long-term capacity roadmap.

Emerging businesses to drive the next phase of growth:

NTPC is transforming from a conventional thermal utility into a diversified integrated energy company, with emerging businesses expected to become meaningful long-term value drivers. The company is expanding beyond power generation into renewables, battery energy storage, green hydrogen, green chemicals, nuclear power, mining, mobility, trading and international operations, creating multiple growth avenues. Dedicated teams have been established to accelerate the commercialization of hydrogen, carbon capture and other low-carbon technologies, while NTPC Mining Ltd (NML) is expected to evolve into a broader mining platform beyond captive coal operations. Management believes these businesses, supported by disciplined capital allocation and technology-led investments, will complement the regulated thermal portfolio, diversify earnings and position NTPC to capture opportunities arising from India's accelerating energy transition.

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