NTPC maintains capacity-addition plans as regulated equity and plant load factors improve

Investment View and Q1 FY27 Highlights

Motilal Oswal Financial Services retained its Neutral rating on NTPC with a target price of Rs 381 in its July 28, 2026 Q1 FY27 result update. The broker viewed the quarter positively as standalone revenue, EBITDA and adjusted profit exceeded its estimates, while management reiterated its FY27 capacity-addition guidance.

However, execution remains an important monitorable, particularly the pace of renewable commissioning by NTPC Green Energy Limited (NGEL) and apparent delays in selected thermal projects.

Financial Performance

The standalone EBITDA beat was primarily driven by other expenses, which were 20% below Motilal Oswal's estimate and 22% below the prior-year level. On a consolidated basis, profit from subsidiaries doubled year on year to Rs 1,200 crore.

The increase in subsidiary profit was attributed to THDC commissioning the 750 MW Tehri pumped-storage project and 660 MW Khurja plant, coal-mine transfers at NTPC Mining, and commissioning of Patratu units.

Operating Performance and Capital Deployment

Standalone commercial generation was 93.6 billion units in Q1 FY27, up 3% year on year and quarter on quarter. The standalone coal plant load factor improved to 76.7% from 75.16% in Q1 FY26, while the solar plant load factor rose to 31.06% from 26.81%. The hydro plant load factor declined to 30.92% from 59.5% a year earlier.

NTPC added 196 MW of standalone capacity during the quarter, comprising 176 MW of renewable capacity and 20 MW of thermal capacity. Consolidated regulated equity reached Rs 1,21,700 crore, up 9.3% year on year, while standalone regulated equity was Rs 92,790 crore. Group capital expenditure stood at Rs 11,590 crore.

Capacity-Addition Guidance and Growth Plans

Management maintained its FY27 total capacity-addition guidance of 9.5 GW and renewable addition guidance of 8 GW across solar, wind and battery energy storage systems.

NTPC added 1.8 GW of consolidated capacity in Q1 FY27, including 820 MW of thermal capacity, 726 MW of renewable capacity and 250 MW of hydro pumped-storage capacity. Consolidated installed capacity stood at 91 GW at the end of the quarter, with 35.7 GW under construction and another 12 GW under tendering.

• Total capacity is targeted to reach 150 GW by FY32 and 250 GW by FY37.
• Renewable energy is expected to represent 40% of capacity by FY32 and 54% by FY37.
• Operational renewable capacity is targeted at 28 GW by FY28, 60 GW by FY32 and 136 GW by FY37.

Execution Monitorables and Longer-Term Projects

Only 595 MW of consolidated renewable capacity was added in Q1 FY27 against the 8 GW FY27 target, making NGEL commissioning a key monitorable. Motilal Oswal also flagged delays indicated by CEA data at Patratu Unit 3, Lara and Talcher thermal projects.

Management's longer-term plans include contributing 30 GW towards the national nuclear target by FY47. ASHVINI's 2.8 GW Mahi Banswara pressurised heavy-water reactor project is under construction. NTPC is also targeting 3 GW to 5 GW of pumped-storage capacity by FY33. Planned capex through FY37 is Rs 16,86,000 crore.

Sum-of-the-Parts Valuation

Motilal Oswal's target price implies 9% upside from the report's CMP of Rs 351.