NTPC - Capacity Addition Provides Long-Term Earnings Visibility: HDFC Securities

HDFC Securities Retail Research

NTPC Ltd. is the largest power generating company in India with 17% of India’s capacity and 24% of generation having installed capacity of 71594 mega watt as on March 01, 2023. Additional projects having capacity of 17543 mega watt are under construction as the company aims to reach an installed capacity of 130 giga watt by 2032.

This translates into 5,000–6,000 mega watt capacity addition every year until 2032 providing longterm earnings visibility. The company operates under a regulated business model with CERC determined tariffs and a fixed return on equity, allowing it to pass on rising fuel costs.

NTPC has also made reliable and adequate fuel arrangements with maximum supplies from domestic sources, increasing production from captive mines and sourcing imported coal for balance requirements.

Globally, there have been many changes in the energy landscape. Transition to renewable sources of energy has gained acceleration. At the same time, energy security has become a priority for every nation.

We believe NTPC has the potential to help the country fulfil both these objectives. It is working on multiple fronts and multiple models to realize a target of achieving 60,000 mega watt of renewable capacity by 2032.

The group is also adding coal-based capacity, hydropower, and nuclear capacity and working on storage technologies to secure affordable and reliable (24x7) power for all.

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