NTPC spurts 11% in three days

NTPC rose 1.68% to Rs 97, extending its winning run to third consecutive session.

Shares of NTPC have surged 11.2% in three trading days from its previous closing low of Rs 87.2 on 13 August 2020.

The counter witnessed demand after the company posted Q1 numbers during market hours on Friday (14 August). The power major's consolidated net profit declined 5.87% to Rs 2948.94 crore on 2.57% decline in revenue from operations to Rs 26,194.76 crore in Q1 June 2020 over Q1 June 2019.

Profit before exceptional item and tax rose 16.10% to Rs 4,280 crore during the quarter. Total tax expense rose 24% to Rs 1386.58 crore in Q1 June 2020 over Q1 June 2019.

NTPC reported exceptional cost of Rs 836.76 crore in Q1 June 2020. The PSU enterprise said that in accordance with the announcement of Government, to allow a rebate of 20%-25% on the capacity charges, the company has approved Rs 1510.47 crore for the 2020-21. During the quarter, the company has accounted a rebate of Rs 836.76 crore in respect of beneficiaries fulling conditions.

NTPC group's total installed capacity increased to 62,110 MW as on 31 March 2020 as against 55,126 MW as on 30 June 2019. The group's commercial capacity increased by 7,634 MW to 61,960 as on 30 June 2020 compared with 54,326 MW as on 30 June 2019.

On the technical front, the stock's RSI (relative strength index) stood at 68.641. The RSI oscillates between zero and 100. Traditionally the RSI is considered overbought when above 70 and oversold when below 30.

The stock is trading between its 100 days and 200 days simple moving average placed at 91.05 and 101.86 respectively. These levels will act as a crucial support and resistance in near term.

In the derivatives market, NTPC's option chain for 27 August 2020 expiry showed maximum call open interest (OI) of 1,302 contracts at the 100 strike price. Maximum put OI of 475 contracts was seen at 90 strike price.

NTPC is a maharatna company operating in the power generation business. The principal business activity of the firm is electric power generation through coal based thermal power plants. It also engages in the business of generation of electricity from hydro and renewable energy sources.

As of 30 June 2020, the Government of India held 51.02% in the PSU company.

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