Accumulate NTPC, target of Rs 196: Anagram

Anagram Research has maintained an accumulate rating on NTPC with a target of Rs 196 in its November 4, 2008 research report. "We believe that the stock is trading at attractive valuation. Typically growth in topline comes with capacity addition as company have no pricing power as tariffs are capped (14% ROEs) but looking at the current deficit scenario and capex plans till FY 12 it makes us believe that company will grow by atleast 15% CAGR over 4 years and any increase in price of coal will provide a further upside to sales growth (as coal price increase are passthrough)."

"Company also plans to add 2000 MW of nuclear capacity in twelfth five-year plan. We arrive at a price target of Rs 196 at a P/E of 20x on FY09 E EPS of Rs 9.8 (Earlier our target price of Rs 210 was based on P/E of 21.5). We maintain Accumulate rating on the stock," says Anagram's research report.

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Source: Moneycontrol