NTPC is the largest power generation company in India, with an overall installed capacity of more than 51 GW. NTPC group contributed 24% to all India generation during FY17.
Valuation: We factor revenue/PAT CAGR of 8%/7% over FY17-20E. While RoE is expected to decline to 10.5% in FY18E, the same is expected to bounce back to 11.3% in FY20E. However, review of regulatory tariff plan for 2019-24 will be a key to watch out for. We maintain BUY rating on the stock with a revised target price (TP) of Rs. 188 based on 1.3x FY20E book value, an upside of 15%.
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