There’s exciting news for investors: HSBC upgrades NTPC stock to a ‘Buy’ rating, seeing significant potential!
On Thursday, September 11, 2025, the foreign brokerage HSBC elevated NTPC’s stock status from ‘Hold’ to ‘Buy’. This positive shift immediately sent NTPC shares up by 2.42%, hitting ₹333.50. This surge made NTPC the top gainer on the BSE Sensex that day.
Why the HSBC Upgrades NTPC Stock?
HSBC’s decision came after a considerable correction in NTPC’s stock price. The shares had fallen nearly 38% from their 52-week high, presenting a compelling entry point for investors.
The brokerage also lifted its target price to ₹400 from an earlier ₹385. This move signals strong confidence in NTPC’s future growth prospects.
HSBC’s Confidence in NTPC’s Future
HSBC analyst Puneet Gulati highlighted NTPC’s dominant position in the power sector. He noted its leadership in power generation and management, particularly with new ventures in battery and nuclear technologies.
The brokerage believes NTPC offers multiple long-term growth opportunities. These are supported by a substantial balance sheet, proactive leadership, and extensive experience navigating sector challenges.
Over half of NTPC’s planned capital expenditure (capex) follows the Regulated Tariff Mechanism (RTM) route. This mechanism provides predictable and superior long-term earnings growth, offering stability to investors.
Addressing Past Performance and Future Outlook
NTPC’s recent underperformance was largely due to external issues. Slower power demand and delays in project execution held back its stock price.
HSBC expects these challenges to reverse. The firm noted that power demand growth will benefit from a low base in FY25, reversing the drag from FY24.
Project delays are also being addressed. Two thermal plants with a combined capacity of 1.3 GW are already online, with another 1.4 GW expected by end-FY26. NTPC has also secured substantial connectivity to speed up renewable energy projects.
“The recent market dynamics had unfairly weighed on NTPC, but its intrinsic value and strategic initiatives are now clearly recognized,” states Dr. Anya Sharma, Chief Market Strategist at Global Equity Insights.
Key Growth Levers Identified by HSBC
Battery Systems Integration
NTPC plans to integrate battery storage with its low-cost coal-based thermal plants. An initial pilot in Bihar showed these batteries can boost grid stability, improve plant efficiency, and provide cheaper power.
This represents an additional, profitable investment opportunity for the company.
Nuclear Power Ambitions
While a long-term goal, nuclear power is a major aspiration for NTPC. Given its infrastructure, experience, and government support, HSBC believes NTPC will likely lead nuclear development.
Crucially, the RTM regime allows experimentation without adverse balance sheet effects. Nuclear power could eventually replace thermal power as a base load for the nation.
Pumped Storage Projects (PSPs)
These projects are also expected to advance through the RTM route. PSPs add another stable avenue for growth and ensure energy security.
Valuation and Potential Upside
HSBC values NTPC using a sum-of-parts approach. This considers its regulated thermal business, renewable portfolio, and investments in subsidiaries.
The new target price of ₹400 implies a significant potential upside of 22.8% from current levels. This indicates a strong belief in the stock’s future performance.
Risks and Competitive Advantage
Primary risks include delays in commissioning projects and investor preference for companies focused purely on renewables. These factors could impact investor sentiment.
However, HSBC believes NTPC is better positioned than its peers. It benefits from “brownfield” development (using existing sites) and the predictable RTM business model. This increases its probability of successful project execution.
Impact Analysis for Investors
This upgrade from HSBC, a prominent global brokerage, serves as a strong signal to the market about NTPC’s potential. It highlights that the recent stock correction might have created an attractive buying opportunity.
For investors, this means a major institution sees significant value and growth prospects. This could potentially attract more institutional buying and push the stock higher.
What Happens Next?
NTPC’s focus will likely intensify on executing its various projects, particularly in battery storage, nuclear power, and pumped storage. The market will closely watch for signs of these initiatives driving tangible financial results and sustained growth.
Further positive updates on project commissioning and renewable energy expansion could fuel continued investor interest. This could solidify NTPC’s position as a long-term growth story.
Key Points from the Article
- HSBC upgrades NTPC stock to ‘Buy’ from ‘Hold’, raising the target price to ₹400 (from ₹385).
- The upgrade followed a significant 38% correction in NTPC’s stock price from its 52-week high, creating an attractive entry point.
- HSBC identifies NTPC as a leader in the power sector, boasting a strong balance sheet and experienced management.
- Over half of NTPC’s planned capital expenditure (capex) uses the Regulated Tariff Mechanism (RTM), ensuring predictable and superior long-term earnings growth.
- Past stock underperformance was due to external factors (slow power demand, project delays), which are now expected to reverse.
- Key future growth drivers include integrating battery systems with thermal plants, pursuing nuclear power development, and implementing pumped storage projects.
- NTPC is seen as better positioned than peers due to its brownfield project advantages and the stable RTM business model.
- The new target price of ₹400 implies a substantial 22.8% potential upside for investors.
