India's 'super-expensive' NTPC, Power Grid neither growth nor value stocks, says Kotak

NHPC

13/06/2024 08:13

** NTPC  NTPC.NS  loses 0.6% and Power Grid  PGRD.NS  sheds
~1%
    ** Kotak Institutional Equities says the two state-run power
firms are neither growth nor value stocks
    ** Calls them examples of market's nature to go by narrative
vs earnings and notes their "super-expensive" valuations
    ** NTPC (at 16x 1-year forward PE) and PGRD (at 18x) are
"optically cheap" relative to peers but are overvalued due to
unrealistic asset growth assumptions, says Kotak 
    ** Peers NHPC  NHPC.NS , Tata Power  TTPW.NS  trade at PEs
of 28x and 38x, respectively
    ** Kotak sees muted earnings growth for NTPC, PGRD due to
dependence on asset growth, which is likely to be slow
    ** NTPC and PGRD up 19% and 36% YTD, respectively, vs 7.7%
rise in Nifty 50  .NSEI 

 (Reporting by Hritam Mukherjee and Bharath Rajeswaran in
Bengaluru)
 ((Hritam.Mukherjee@thomsonreuters.com;))