Maintain Buy on NTPC with target price of Rs.240 - Motilal Oswal

NTPC (NATP IN; Mkt Cap USD33.3b, CMP Rs185, Buy)

NTPC posted 3QFY11 revenue of Rs135b (up 21% YoY), EBITDA of Rs38.3b (up 14% YoY) and reported PAT of Rs23.7b (up 5% YoY).

In 3QFY11 electricity generation was 54.7BUs (flat YoY) and sales were 51.1BUs (down 1% YoY).

NTPC signed cumulative PPAs for 100GW of capacity, a positive surprise, which provides growth visibility.

NTPC aims to reach 75GW capacity by FY17 and we expect a large part of the BTG awards over 18 months.

We expect NTPC to post net profit of Rs86.5b in FY11 (down 6.4% YoY), Rs100.2b in FY12 (up 16% YoY) and Rs119b in FY13 (up 19% YoY). The stock trades at a PER of 15.2x FY12E, 12.8x FY13E and P/BV of 2.1x FY12E, 1.9x FY13E. Maintain Buy with a price target of Rs240.

Source : Equity Bulls

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