Buy NTPC; target of Rs 240: Motilal Oswal - Moneycontrol.com -

“NTPC has capacity addition to accelerate, with 17.5GW of projects under construction getting commissioned over FY11- 14. As at March 2010, NTPC has already spent 31% of total project cost on the projects under construction, which is likely to increase to ~47% by the end of FY11. We estimate NTPC's capacity addition in the Eleventh Plan at 9.8GW - a significant underachievement, given the original target of 22.4GW. As a large part of these projects has been under construction since 2007, we expect bunching up of project commissioning, going forward.'"

"FY11BE capex for NTPC stands at Rs 224 billion and is up 120%, indicating that activities on the ground have started improving. We arrive at a target price of Rs 240 (upside of 20%), based on a combination of the DCF and SOTP valuation methodologies. We upgrade the stock to Buy,” says Motilal Oswal research report.

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