---
endpoint: analytics
pattern: Power
status: done
latency_ms: 198607
conversation_id: b27fcd3a-43fd-4008-ae51-e0e74f1ad37f
citations: 16
created: 2026-05-31 21:13:14Z
---

# Is CLSA incrementally more positive/negative on NTPC. If so, why?

## CLSA on NTPC: incrementally MORE POSITIVE

**Rating / Target unchanged, but conviction has stepped up materially.** Both the 25-May standalone NTPC note and the 29-Jun India Power Pulse keep NTPC at **O-PF (Outperform), TP Rs459** [2][7]. What is incrementally more positive is the *narrative* — bigger capex, faster commissioning, structurally higher ROEs, accelerating energy-transition build-out, and an explicit "best energy-transition story in the world" framing — combined with a positioning tailwind as FIIs unwind underweights. Lead analyst is **Bharat Parekh (CLSA India Private Limited, @clsa.com)** — this is genuine CLSA-parent coverage, not CLST.

---

### Why incrementally more positive — six drivers

**1. US$31bn capex plan (FY26–28) was a positive surprise — 2.4x prior period**
The 25-May FY25-results note flagged the upgraded capex envelope explicitly as "a surprise," supported by **16.9GW of regulated u/c + 14.6GW of NFE u/c**, against an 80GW installed base. CLSA notes "we see a continued rerating for NTPC, which started in 2021 when it began leading the energy transition while focusing on energy security." [1] The capex acceleration is visible in the side-by-side with Power Grid:

| Capex (Rs bn) | FY23 | FY24 | FY25 | FY26 | FY27 | FY28 |
|---|---|---|---|---|---|---|
| Power Grid | 92 | 125 | 263 | 350 | 380 | 450 |
| **NTPC** | **352** | **354** | **446** | **450** | **650** | **1,000** |
[13]

**2. Capacity additions inflect sharply — 11.8GW expected in FY26 (3x YoY)**
RegEq growth had slowed in FY25 because large thermal plants slipped 3–6 months on commissioning. CLSA expects this to unwind — "**RegEq growth should enter double digits in FY26** with the start of 4.6GW of regulated projects vs 0.7GW in FY25, apart from 7.2GW of variable RE." NTPC has a 27GW fossil pipeline (40% of FY25 capacity) with 17GW u/c and a further 10GW to be awarded; 8.8GW was awarded in FY25 with capable vendors like L&T winning, "improving visibility of its execution." [5]

**3. FY25 results validated the regulatory thesis**
PAT was up 10% YoY on only 4% RegEq growth — driven by stellar 4Q operational efficiency (big swing from under-recovery), **+78% YoY incentives** on a 310bps+ rise in thermal PAF, and a **supportive FY25-29 regulatory regime for energy security**. CLSA reads this as the regulator "recognising the importance of base load power by lifting the effective ROE by offering more incentives and by removing difficulty in earning an ROE from FY25." [3] Consolidated PAT ran 26% ahead of parent on subsidiary/JV strength.

**4. ROE expansion — +230bps over FY25–27CL**
ROE moves from 11.6% (FY25A) → 13.4% (FY26CL) → 13.9% (FY27CL), with EPS growth of **+25.4% in FY26CL** then +12.2% in FY27CL [6]. The cross-utility comparison underscores convergence with PWGR:

| ROE | FY23 | FY25CL | FY27CL |
|---|---|---|---|
| NHPC | 10% | 9% | 14% |
| **NTPC** | **12%** | **13.3%** | **14.1%** |
| PWGR | 18% | 17.7% | 18% |
[12]

**5. Energy-transition leadership — 46% of 60GW NFE vision already operating or u/c**
NTPC has reached **18% of its FY32 60GW vision** with **17GW of NFE/storage u/c** [4]; first GW-scale NFE commissioning in 1QFY26; **entry into nuclear in 2QFY26**. CLSA identifies **18 catalysts for NTPC in 2025** and points to the stock trading at **10.2x FY27CL EPS ex-NGEL value** [4]. Fuel-mix transition is concrete:

| Fuel mix | Earlier point | FY34CL |
|---|---|---|
| Coal/Gas | 97% | 49% (Coal 46% + Gas 3%) |
| Solar/Wind | ~1% | **43%** |
| Hydro | 2% | 5% |
| Nuclear | – | 3% |
[15]

Regulated equity is projected to grow from **Rs909bn (FY25) → Rs1,223bn (FY28CL) → Rs1,555bn (FY34CL)** — 1.7x growth path beyond the consolidated 1.7x already achieved over FY20-25 [16].

**6. Positioning tailwind — FIIs unwinding underweight**
The 29-Jun NDR feedback note is unambiguous: "We observed foreign investors to be **underweight NTPC** but overweight PWGR, which has underperformed NTPC over the past three years; **we see NTPC as emerging as the best energy transition story in the world**." [8] And: "FIIs are cutting their underweight in NTPC, while DII remained overweight but cut it in 4QFY25." [9] CLSA flags NTPC (alongside HAL) as the outperformer "over the past two years" [10] and frames the sector view as "Compelling valuations; time to buy . . . but be selective" with **NTPC, NHPC, CESC as the relative-value picks vs the expensive TPWR/JSWE.** [11]

---

### Valuation — TP Rs459 anchored to SOTP with 28% from clean/green

| Bucket | Method | Rs/share |
|---|---|---|
| Core business | DCF at 10.7% CoE | 316 |
| NTPC Green (89%) + NTPC RE | 12x/10x 1Y fwd EV/Ebitda (10% holdco discount on Green) | 77 |
| NTPC Hydro (THDC 74% + NEEPCO + Koldam) | 11x–12x 1Y fwd EV/Ebitda | 43 |
| Other subsidiaries (ASHWINI JV, Hindustan Urvarak, RGPPL) | mixed | 23 |
| **Total target** | | **459** |
[14]

Implied upside ~33–36% from base prices of Rs343 (23-May) to Rs338 (29-Jun) [2][7]. Share of clean/green assets is **28% of NTPC's SOTP and CLSA expects it to keep rising** as NTPC leads the energy transition [14].

---

### One-line synthesis
Rating/TP are unchanged at **O-PF / Rs459** across both prints, but CLSA's incremental tone is **more constructive**: the upgraded US$31bn capex plan, 3x acceleration in FY26 commissioning, validated regulatory regime, +230bps ROE expansion, and the explicit framing of NTPC as "the best energy-transition story in the world" with FIIs unwinding underweights — all point to higher conviction and a continued re-rating thesis.

---

**Sources**
[1] NTPC - O-PF (Lofty guidance) — CLSA, 25-May-2025 — 607960472LinqAlpha.PDF (Bharat Parekh, CLSA India Private Limited)
[2] NTPC - O-PF (Lofty guidance) — CLSA, 25-May-2025 — 12M target Rs459, +33% upside, Mkt cap US$39.2bn
[3] NTPC - O-PF (Lofty guidance) — CLSA, 25-May-2025 — FY25: improved operations & new regulation driver
[4] NTPC - O-PF (Lofty guidance) — CLSA, 25-May-2025 — 60GW NFE vision; 18 catalysts; 10.2x FY27CL EPS ex-NGEL
[5] NTPC - O-PF (Lofty guidance) — CLSA, 25-May-2025 — RegEq enters double digits in FY26; 27GW fossil pipeline; US$31bn capex
[6] NTPC - O-PF (Lofty guidance) — CLSA, 25-May-2025 — Financials at a glance (EPS +25.4% FY26CL, ROE 13.4%→13.9%)
[7] India Power Pulse (US NDR feedback) — CLSA, 29-Jun-2025 — 607963001LinqAlpha.PDF — NTPC O-PF, TP Rs459, +35.7% upside
[8] India Power Pulse — CLSA, 29-Jun-2025 — "FIIs underweight NTPC, overweight PWGR... best energy transition story in the world"
[9] India Power Pulse — CLSA, 29-Jun-2025 — FIIs cutting underweight in NTPC; DII overweight but trimmed in 4QFY25
[10] India Power Pulse — CLSA, 29-Jun-2025 — HAL and NTPC outperformers over past two years
[11] India Power Pulse — CLSA, 29-Jun-2025 — "Compelling valuations; time to buy . . . be selective"; NTPC/NHPC/CESC = relative value
[12] India Power Pulse — CLSA, 29-Jun-2025 — ROE forecasts FY23/FY25CL/FY27CL for NHPC, NTPC, PWGR
[13] India Power Pulse — CLSA, 29-Jun-2025 — Power Grid & NTPC capex trajectories FY23-FY28
[14] India Power Pulse — CLSA, 29-Jun-2025 — NTPC SOTP target Rs459/share (28% from clean/green; rising)
[15] India Power Pulse — CLSA, 29-Jun-2025 — NTPC FY34 fuel mix (43% solar/wind, 46% coal)
[16] India Power Pulse — CLSA, 29-Jun-2025 — NTPC Regulated Equity projection FY10–FY34CL

## Citations

- [1] **607960472LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960472LinqAlpha.PDF>
- [2] **607960472LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960472LinqAlpha.PDF>
- [3] **607960472LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960472LinqAlpha.PDF>
- [4] **607960472LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960472LinqAlpha.PDF>
- [5] **607960472LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960472LinqAlpha.PDF>
- [6] **607960472LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960472LinqAlpha.PDF>
- [7] **607963001LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607963001LinqAlpha.PDF>
- [8] **607963001LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607963001LinqAlpha.PDF>
- [9] **607963001LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607963001LinqAlpha.PDF>
- [10] **607963001LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607963001LinqAlpha.PDF>
- [11] **607963001LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607963001LinqAlpha.PDF>
- [12] **607963001LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607963001LinqAlpha.PDF>
- [13] **607963001LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607963001LinqAlpha.PDF>
- [14] **607963001LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607963001LinqAlpha.PDF>
- [15] **607963001LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607963001LinqAlpha.PDF>
- [16] **607963001LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607963001LinqAlpha.PDF>

