Better execution needed to justify valuation for NTPC Green Energy

If we project forward to FY28, NGEL's current portfolio of ongoing projects with 17GW will contribute fully to earnings, with around 55 per cent annual growth in operating profit over FY2024-28

NTPC Green Energy (NGEL) has gained over 30 per cent since an IPO was launched at Rs 108 a few days ago. The surge after listing suggests the market thinks NGEL was undervalued in the IPO. NGEL saw revenue growth at 47 per cent annually over financial year 2022-24 with an operating profit margin at 87-90 per cent in previous three years, as operating profit rose from Rs 795 crore in financial year 2022 (FY22) to Rs 1,747 crore in FY24.

 

Between FY22-FY24, net profit rose by 90 per cent annually to Rs 345 crore (FY22 net profit was Rs