Results: NTPC Limited Exceeded Expectations And The Consensus Has Updated Its Estimates
The quarterly results for NTPC Limited (NSE:NTPC) were released last week, making it a good time to revisit its performance. The result was positive overall - although revenues of ₹507b were in line with what the analysts predicted, NTPC surprised by delivering a statutory profit of ₹6.93 per share, modestly greater than expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
After the latest results, the ten analysts covering NTPC are now predicting revenues of ₹2.10t in 2027. If met, this would reflect a notable 9.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to reduce 8.8% to ₹26.10 in the same period. Before this earnings report, the analysts had been forecasting revenues of ₹2.13t and earnings per share (EPS) of ₹26.19 in 2027. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
Check out our latest analysis for NTPC
The analysts reconfirmed their price target of ₹434, showing that the business is executing well and in line with expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values NTPC at ₹485 per share, while the most bearish prices it at ₹345. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await NTPC shareholders.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting NTPC's growth to accelerate, with the forecast 13% annualised growth to the end of 2027 ranking favourably alongside historical growth of 8.5% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 18% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, NTPC is expected to grow slower than the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at ₹434, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for NTPC going out to 2029, and you can see them free on our platform here.
It is also worth noting that we have found 3 warning signs for NTPC (2 are potentially serious!) that you need to take into consideration.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.