NTPC shares gain 3% after positive outlook by Bernstein

NTPC shares surged 3% in morning trading today, on November 25, 2024, reaching ₹377 per share. This marks the second consecutive day of gains following Bernstein’s reaffirmation of an “outperform” rating for the stock. The international brokerage has forecasted a 20.5% upside, setting a target price of ₹440 per share. 

This positive outlook has bolstered investor confidence, making NTPC a noteworthy contender in share market investment portfolios.

Bernstein’s rationale for the rating

Bernstein cited robust power demand, evening shortages, and NTPC's cost-of-debt advantage as the primary reasons for their optimistic projection. These factors are expected to support the company’s performance in the medium term. Notably, NTPC’s shares are currently valued at 16 times FY25 earnings and 10 times EV/EBITDA, aligning with global benchmarks.

This makes NTPC an appealing option for those considering share market investment, as its valuation reflects both stability and growth potential.

NTPC’s recent performance

Despite the recent rally, NTPC shares have fallen 12% in the past month. This decline, however, appears to be a temporary setback, as the stock is regaining momentum due to positive market sentiment and the brokerage’s endorsement.

Why NTPC stands out in the market

• Strong fundamentals: NTPC’s ability to meet rising power demand, coupled with its cost-of-debt advantage, positions it as a reliable player in the energy sector.
• Attractive valuation: With its current multiples in line with global peers, NTPC remains a competitive choice in the utility segment.
• Growth potential: The forecasted 20.5% upside and Bernstein’s “outperform” rating highlight its potential to deliver significant returns for investors focused on share market investment.

What investors should consider

For investors exploring share market investment, NTPC’s current position in the market is promising. The company’s consistent performance, coupled with its alignment with global valuation standards, makes it a stock worth monitoring. The forecasted upside of over 20% further underscores its potential as a strong addition to diversified investment portfolios.

Invest safely

NTPC’s recent 3% surge, driven by Bernstein’s positive rating and target price of ₹440, has reinvigorated interest in the stock. With robust fundamentals and minimal downside risks, NTPC presents a compelling opportunity for those considering share market investment in the utilities sector. For both seasoned investors and newcomers, NTPC's potential upside offers a chance to capitalise on its growth trajectory.