1 week ago
Nuvama names ACME Solar, NTPC, Power Grid top picks
Nuvama, a brokerage, shared its favourite electricity-related stocks.
It chose ACME Solar, NTPC and Power Grid as its top three picks.
It gave each of these companies a price target.
Nuvama said electricity demand is strong and that more renewable-energy projects may be added in FY27.
It expects some worker shortages to improve in the second half of FY27.
However, some companies are facing problems that could slow their progress.
Suzlon completed less work than expected and reported weaker profit.
ACME Solar faces project delays and a possible reduction in ownership after raising money.
CESC’s profit grew only slightly, although its businesses showed mixed performance.
Nuvama’s top power-sector picks are ACME Solar, NTPC and Power Grid, with targets of Rs 448, Rs 445 and Rs 283, respectively.
Nuvama expects labour constraints to ease in H2FY27, while demand has grown 9.3% YTD in FY27 and renewable additions could reach 45–50GW.
The brokerage set targets of Rs 51 for Suzlon Energy, Rs 400 for Tata Power, Rs 118 for IEX and Rs 212 for CESC.
Suzlon’s Q1 execution was 506MW against an estimated 555MW, while its 15.5% EBITDA margin contributed to a 20% PAT miss.
Nuvama cited risks including delayed ACME Solar capacity, QIP dilution, transmission-related delays, Suzlon logistics disruptions and subdued CESC profit growth.
- Who
- Nuvama, an equity brokerage, and the power-sector companies it analyzed, including ACME Solar, NTPC, Power Grid, Suzlon Energy, Tata Power, IEX and CESC.
- What
- Nuvama identified three top power-stock ideas and issued target prices for seven companies.
- Where
- The analysis concerns India’s power, renewable-energy and transmission sectors.
- When
- The outlook covers FY27 and FY26–28E estimates; the operational updates refer partly to Q1.
- Why
- Nuvama cited strong electricity demand, rising renewable-energy additions and expected improvement in execution conditions, while also identifying company-specific risks.
Positive sector outlook
Risks and constraints
Power-sector momentum
Positive sector outlook
Nuvama said robust demand, accelerating renewable additions and favourable macro conditions support generation and transmission stocks.
Risks and constraints
The brokerage also noted labour constraints, near-term renewable-growth challenges and transmission-related delays that could affect execution.
NTPC valuation and growth
Positive sector outlook
Nuvama highlighted NTPC’s steady 16–17% core RoE, 9.4% adjusted consolidated EPS CAGR estimate for FY26–28E and valuation of 1.4 times FY28E P/BV.
Risks and constraints
Nuvama said its assessment factors in near-term growth challenges in renewable energy.
Company execution
Positive sector outlook
Suzlon maintained its 17–18% target EBITDA-margin band, while CESC benefited from higher generation and improved performance at some businesses.
Risks and constraints
Suzlon’s Q1 execution was below estimate and its PAT missed by 20%; ACME Solar faces delayed capacity and QIP dilution, while CESC’s Q1 PAT rose only 4% year on year.
Key facts
- Top pick 1
- ACME Solar; target price Rs 448.
- Top pick 2
- NTPC; target price Rs 445.
- Top pick 3
- Power Grid; target price Rs 283.
- FY27 demand growth
- Power demand grew 9.3% YTD in FY27, according to Nuvama.
- Expected renewable additions
- Nuvama expects 45–50GW of renewable-energy additions in FY27.
- Suzlon Q1 execution
- Suzlon executed 506MW versus Nuvama’s 555MW estimate, with a 15.5% EBITDA margin.
- Additional targets
- Suzlon Energy Rs 51, Tata Power Rs 400, IEX Rs 118 and CESC Rs 212.
Quotes
Management of Suzlon Energy
Suzlon Energy management
“NTPC remains one of our top picks given steady 16–17% core RoE and a 9.4 per cent adjusted consolidated EPS CAGR over FY26–28E (RE-led growth) while trading at a mere 1.4 times FY28E P/BV. This is despite factoring in near term growth challenges in RE.”
businesstoday.in
“10–20 per cent shortfall in execution due to temporary logistic disruptions arising from the geopolitical situation, certain strategic investments and change of scope and segment mix while maintaining 17–18 per cent target Ebitda margin band.”
businesstoday.in
Sources
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