NTPC (National Thermal Power Corporation Limited) shares have become increasingly appealing to investors due to its impressive growth trajectory and promising future prospects. Over the last two years, NTPC shares have experienced a remarkable price surge, skyrocketing from 90 rupees to 236 rupees, marking a phenomenal 162% growth, underlining its potential for long-term investors. Let’s delve deeper into the key factors that make NTPC shares a sound investment choice.
NTPC’s Ambitious Expansion Plans
One of the most compelling reasons to consider NTPC shares for long-term investment is the company’s ambitious expansion plans. NTPC aims to significantly increase its power generation capacity from approximately 63 GW to 130 GW by 2032. This expansion is indicative of NTPC’s commitment to meet the growing energy demands of India. It’s worth noting that India’s power sector is set to experience substantial growth in the coming years, which should benefit NTPC and its investors.
Moreover, NTPC is committed to reducing its carbon footprint and embracing renewable energy sources. The company has set a target to increase its concentration of non-fossil fuel assets from 7% of total capacity to 30% by 2032. This commitment to cleaner energy aligns with global efforts to combat climate change and positions NTPC as a responsible and forward-thinking energy company.
NTPC Weekly Chart: Strong Uptrend Continues
The technical analysis of the weekly chart of NTPC shows that the stock is in a strong uptrend. The price has been making higher highs and higher lows for several weeks, and the trendline and moving averages are both sloping upwards. Additionally, the RSI is in the neutral zone, which indicates that the stock is not overbought.
Cost-Plus Tariff Structure Ensures Profitability
NTPC’s robust profitability is underpinned by a cost-plus tariff structure for the sale of power to DISCOMS (Distribution Companies). This structure provides a level of predictability and stability to NTPC’s revenue, which is a vital aspect for long-term investors. The cost-plus tariff system allows NTPC to cover its operational costs and maintain a healthy profit margin.
Key Financial Factors Favoring NTPC Shares
When considering a long-term investment, financial stability and shareholder benefits are crucial. NTPC shares have some noteworthy financial factors working in their favor:
- Dividend Yield: NTPC offers a commendable dividend yield of 3.06%. For long-term investors, a consistent dividend income can be a valuable source of returns, providing stability in uncertain market conditions.
- Dividend Payout: The company has been maintaining a healthy dividend payout of 41.0%. This consistent distribution of profits to shareholders reflects NTPC’s commitment to rewarding its investors.
- Improved Debtor Days: NTPC’s debtor days, a measure of how quickly the company collects payments from its customers, have improved from 76.3 to 59.7 days. This indicates efficient financial management, reducing the risk of bad debt and ensuring a steady cash flow for the company.
For investors exploring opportunities in the Indian economy, power sector, and government support, NTPC’s impressive growth and these underlying factors make it a noteworthy consideration. However, due diligence and individual financial goals should guide investment decisions.
Disclaimer: (This information is provided solely for informational purposes. It is important to note that investing in the market or a business idea involves market risks. Before investing money as an investor/ owner/ partner, always consult an expert. DNP News Network Private Limited never advises to invest money on stocks or any specific business idea. We will not be liable for any financial losses.)
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