Timely execution of new capacities essential for gains in NTPC stock

The power utility is aiming to add 26-27GW of thermal coal capacity, and 60GW renewable energy (RE) capacity by FY32 mainly through listed subsidiary

India’s biggest power generation company, NTPC, is set to play a key role in energy transition by transforming into a diversified generator.

 

As announced at its annual investor meet, the state-owned firm has raised its capacity target to 149 Gw by FY32 (versus 130 Gw earlier), from the current operational 83 Gw. It has a massive capex outlay of ₹7 trillion.

 

The power utility is aiming to add 26-27 Gw of thermal coal capacity, and 60 Gw renewable energy (RE) capacity by FY32 mainly through its listed subsidiary, NTPC Green Energy, which has contracted and awarded capacity of over 23 Gw.

 

It is also expanding into green hydrogen, energy storage and nuclear energy (targeting 30 Gw nuclear capacity by FY47). Execution will be crucial.

 

The current under-construction capacity stands at 31 Gw. The April-June quarter (Q1) of FY26 has started with 2.7 Gw of capacity addition, in comparison to 4 Gw in full FY25 where it missed guidance of 6.8 Gw.

 

NTPC is targeting 11.8 Gw for FY26 and 9.9 Gw for FY27.

 

The management said it has 30.85 Gw of under-construction capacity at the group level. The under-construction capacity includes 15.6 Gw of coal, 2 Gw of hydro and pump storage project (PSP), and 13.2 Gw of RE power to take it to 113.5 Gw.

 

NTPC plans to tender out another 10 Gw of coal projects in FY26 (mostly brownfield) and has plans for an additional 11 Gw of RE capacity.

 

Cumulative capex will be ₹7 trillion by 2032. This includes (1) 31 Gw of under-construction coal, hydro and RE; (2) 7 Gw of additional thermal; (3) another 39 Gw of RE capacity (beyond 8 Gw operational and 13Gw under-construction); (4) 4-6 Gw of PSP (including 1 Gw in FY26); and (5) nuclear capacity (2.8 Gw under construction and 2.8 Gw to be awarded).

 

The management is working on another 30 Gw of nuclear capacity targeted by 2047 (through its joint venture (JV) ‘Ashwini’ with NPCIL), and 21.4 Gw of PSP (11 Gw in NTPC and 10.4 Gw via THDC and NEEPCO) with 4-6 Gw capacity expected by 2032, and green hydrogen and other energy storage projects.

 

NTPC has lagged its capacity addition targets, meeting on average 59 per cent of targets over the past decade. In FY25, NTPC targeted 6.7 Gw against an actual add of 3.9 Gw, including an acquisition of 2.2 Gw. Q1FY26 has started better with an addition of 2.7 Gw against a target of 11.8 Gw for FY26. So there's an execution risk.

 

NTPC is targeting commissioning of 2.8 Gw of nuclear at Mahi Banswara (JV with NPCIL) by FY32, with plans to award 2.8 Gw in the current financial year for which it has identified potential sites. The nuclear projects would be developed either through its joint venture (JV), ‘Ashwini’ with NPCIL, or through its wholly owned subsidiary, ‘NPUNL’. There's a long gestation period for nuclear projects.

 

NTPC group plans to add 21,370 Mw in pumped storage projects — 11,000 Mw under NTPC and 10,370 Mw via THDC and NEEPCO. It has received commercial operation date for two PSP units of 250 Mw each of THDC, with the balance 500 Mw to be commissioned through THDC in FY26.

 

NTPC is targeting another 3-5 Gw of PSP capacity by FY32.

 

The peak capacity of its captive coal mines stood at 72.6 million metric tonnes per annum (MMTPA), with another 19 MMTPA under development, taking total capacity to 91.6 MMTPA. NTPC’s coal mining had increased to 46 million tonnes (MT) (up 31 per cent year-on-year (Y-o-Y)) in FY25.

 

NTPC reported standalone revenue of ₹42,600 crore in Q1FY26, below estimate due to lower generation. Earnings before interest, taxes, depreciation and amortisation (Ebitda) was ₹10,300 crore (down 17 per cent Y-o-Y), with a rise of 86 per cent Y-o-Y in other expenses. 

 

Reported profit after tax (PAT) of ₹4,770 crore, up 6 per cent YoY, was driven by higher other income and a lower tax rate. NTPC Green had consolidated revenue and Ebitda of ₹680 crore and ₹600 crore, respectively, in Q1, with about 18 per cent Y-o-Y growth. PAT rose 59 per cent to ₹220 crore.

 

The stock, which has been trading range-bound for over three months, closed at ₹342 on Wednesday on the BSE.

 

According to Bloomberg, 14 of the 16 analysts polled in the last one month are bullish on the stock, while one each is either bearish or neutral. Their average one-year target price is ₹412.44.