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NTPC GREEN ENERGY LTD | COMPANY STUDY | RESEARCH ANALYSIS

 As part of my 100-Day Research & Analysis Challenge under NISM (Research Analyst), I chose to deep-dive into the Renewable Energy sector, with NTPC Renewable Energy. as my Seventh Company Study.

This note focuses on:

•Business fundamentals

•Financial performance

•Stock price behaviour

NTPC Green Energy is a renewable energy company that focuses on undertaking projects through organic and inorganic routes.

Mar Cap: ₹78,766 Cr.

Price to Earning: 130

ROCE:4.89 %

Return on equity:3.85 %

Borrowings: As of H1FY25, Co. had a total borrowings of 17,057 Crs of which only 2530 is a secured borrowings. The Company will also utilize 7,000 Crs from the IPO Proceeds to reduce its borrowings.

Sales growth Years: 19%

Profit Var : 94%

Promoter holding: 89.01%

FIIs holding: 1.61% (Decresed from last year)

DIIs Holding: 4.80% (Decreased from last year)

Public Holding: 4.58% (Increase from last year)

NO. of Share Holders: 13,32,650 (Decreased from last year)

•NTPC Green Energy Limited (NGEL) is a renewable energy subsidiary of NTPC Limited, a central public sector enterprise.

•Their business model centers on development, construction, and operation of renewable energy projects (solar and wind), supported by long-term Power Purchase Agreements (PPAs).

Company Overview:

Solar Energy Sales - 91%

Wind eNERGY Sales - 4.5%

Consultancy & Project Management fee - 1.5%

Notable clients include:

Their operational projects are distributed across 6 Indian states, with Rajasthan contributing 62.2% of the operational capacity.

Financial Performance:

~Company has delivered quite normal growth of 19%.

~As of H1FY25, Co. had a total borrowings of 17,057 Crs of which only 2530 is a secured borrowings. The Company will also utilize 7,000 Crs from the IPO Proceeds to reduce its borrowings

Share Price Performance:

Despite positive revenue growth, the stock has decreased.

Stock corrected from levels above 148₹ to around 90₹ for last 2 years.

Stock has given -15% return.

This divergence between financial growth and stock price create doubts.

Why Is the Share Price Falling?(Cons)

~Stock is trading at 4.21 times its book value.

~Though the company is reporting repeated profits, it is not paying out dividend.

~Company might be capitalizing the interest cost.

~Number of shares has fall and HNIs & Institutional investor reduced thier holding.

Key Learnings from This Analysis-

~Profit growth alone is not enough.

~Cash flow quality and margins matter more than topline numbers.

~Renewable Energy is a structural story with cyclical earnings.

Conclusion-

The renewable energy opportunity remains intact, but:

In execution-driven businesses, sustainable profitability and cash flow discipline decide long-term shareholder returns.

Last but not least:

Company is focusing on green hydrogen, green chemicals, and battery energy storage systems (BESS).

⚠️ Disclaimer:

Investment in the securities market is subject to market risks. Read all related documents carefully before investing. Past performance is not indicative of future results. The stock market is unpredictable, and returns are not guaranteed. Make informed decisions, stay cautious, and consult a financial expert before investing.


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