Brokerage firm Prabhudas Lilladher has kept a 'Buy' rating on NTPC with a target price of Rs 421 after the power major posted a 40.7% jump in consolidated net profit. Investors are also noting an interim dividend of Rs 3 per share, with a record date of November 6, 2026.
Brokerage firm Prabhudas Lilladher has maintained a "Buy" rating on state-owned power giant NTPC, setting a target price of Rs 421. This outlook follows a strong performance in the second quarter of the 2027 fiscal year, where the company saw significant profit growth and operational improvements.
NTPC reported a 14% year-on-year rise in standalone net profit to Rs 5,320 crore, while consolidated net profit increased by 40.7% to Rs 7,351 crore. The growth has been supported by improved operational efficiency in its thermal plants, which are currently running with a higher capacity usage than the national average. Alongside these financial results, the company has declared an interim dividend of Rs 3 per share, with the record date set for November 6, 2026.
Expansion and Green Energy Strategy
The company is focusing on rapid capacity expansion, with group targets set at 8GW for the current fiscal year, followed by 9.6GW and 10.9GW in subsequent years. A major driver of this growth is NTPC Green Energy, which has set its own capacity addition guidance at 6.5GW for FY27. To support the shift toward renewable power, the company is investing in battery energy storage systems, aiming for a 47GWh capacity. This strategy is critical as it helps the company manage grid curtailment, a situation where renewable power generated cannot be sent to the grid due to congestion or low demand.
Operational and Sector Risks
While the expansion path is aggressive, investors may track specific operational and financial challenges. NTPC's thermal power plants face increased wear and tear from frequent load adjustments, which has historically led to maintenance issues such as boiler tube leaks.
Additionally, the financial health of state distribution companies (discoms) remains a persistent point of concern for the sector. Delays in payments from these distributors can impact the company’s cash flow and revenue realization. Furthermore, successfully integrating large-scale renewable energy into the grid requires careful planning to prevent wastage, making the execution of battery storage projects a key monitorable. Investors will likely look for updates on how the company manages these maintenance and payment cycle risks while continuing to scale its renewable portfolio in the coming quarters.