HSBC upgrades NTPC to 'Buy' on multiple growth levers, lifts target to ₹400

HSBC on NTPC: NTPC shares were in demand on Thursday, September 11, 2025, after foreign brokerage HSBC upgraded the stock to a ‘Buy’ from ‘Hold’. The scrip rose as much as 2.42 per cent to hit an intraday high of ₹333.50 per share. Around 2 PM, NTPC shares were trading 2.01 per cent higher at ₹332.15. In comparison, the BSE Sensex was up 0.18 per cent at 81,572.205. 

Notably, NTPC was trading as the top gainer on the 30-share BSE Sensex index.

 

The upgrade came on the back of recent correction in NTPC’s stock price, with HSBC also raising its target price to ₹400 from ₹385 earlier. Notably, the stock has corrected nearly 38 per cent from its 52-week high of ₹448.30, hit on September 30, 2024, BSE data showed.  CATCH STOCK MARKET UPDATES TODAY LIVE

 

Upgrade NTPC Stock to ‘Buy’ on multiple growth drivers

 

In a note dated September 11, HSBC analyst,Puneet Gulati, highlighted NTPC’s leading position in the power sector, calling it “at the forefront of power management and generation, with the latest in the repository being battery and nuclear.” 

 

HSBC believes that NTPC offers multiple long-term growth levers while being supported by a large balance sheet, proactive management, and deep experience in handling sector volatility.

 

“More than half of planned capex still in RTM route, providing certainty of superior long-term earnings growth, in our view,” HSBC said. It added that the upgrade reflects a roll-forward in valuation and changes to its cost of equity assumptions.

 

The brokerage pointed out that NTPC’s recent underperformance was largely driven by external factors. “Slowness in power demand, delays in execution of thermal and renewable capacity have driven down stock performance, which we think will reverse,” it said. 

 

NTPC is down 16 per cent over the past year, compared with a flat Nifty performance. HSBC expects the scenario to change as power demand growth benefits from a low FY25 base, reversing the drag from a high FY24 base.

 

Execution delays are also being addressed, according to the brokerage. Two thermal plants with combined capacity of 1.3 GW have already been commissioned, while another 1.4 GW is likely to be commissioned by end-FY26. NTPC has also tied up “substantial connectivity, which should improve the pace of renewable energy execution.”  ALSO READ | 4 reasons HDFC Securities recommends 'Add' on JK Cement, raises target

Growth levers: Battery, nuclear, pumped storage

 

HSBC’s note underscored three potential growth avenues for NTPC. First, the integration of battery systems with its low-cost coal-based thermal plants could provide an additional return-on-equity accretive capex opportunity. The brokerage said the initial experiment in Bihar demonstrated how batteries can improve grid stability, enhance plant efficiency by limiting frequent backing down, and supply cheaper power to discoms.

 

Second, nuclear power remains a long-term but major aspiration. While timing remains uncertain, HSBC believes NTPC “will likely be at the forefront of nuclear development” given its infrastructure, experience, and government support. “The RTM regime allows it to experiment without adverse balance sheet effects,” it said, adding that nuclear power has the potential to replace thermal power for base load in the future.

 

Third, pumped storage projects (PSPs) are also expected to come through the RTM route, adding another stable growth avenue.

 

Valuation and risks

 

HSBC values NTPC on a sum-of-parts basis, factoring in its regulated-return thermal business, renewable portfolio, and investments in subsidiaries. “We get to a fair value of ₹419 (from ₹418 as of March 2026), then discount that by six (earlier nine) months to arrive at our ₹400 (earlier ₹385) TP as at September,” the brokerage said. The revised target price implies a potential upside of 22.8 per cent.

 

The risks, however, include delayed commissioning of projects and investor preference for fully renewable plays. Still, HSBC sees NTPC as being better placed than peers. “We believe among all the thermal capacities that investors expect to commission, NTPC has the highest probability as it benefits from being a brownfield and RTM business.”