A week ago, NTPC Limited (NSE:NTPC) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 13% higher than the analysts had forecast, at ₹543b, while EPS were ₹7.25 beating analyst models by 32%. 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.
Taking into account the latest results, the current consensus, from the nine analysts covering NTPC, is for revenues of ₹1.91t in 2027. This implies a noticeable 4.6% reduction in NTPC's revenue over the past 12 months. Statutory earnings per share are expected to nosedive 25% to ₹22.90 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹2.09t and earnings per share (EPS) of ₹25.91 in 2027. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a substantial drop in earnings per share estimates.
Check out our latest analysis for NTPC
The analysts made no major changes to their price target of ₹422, suggesting the downgrades are not expected to have a long-term impact on NTPC's valuation. 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. There are some variant perceptions on NTPC, with the most bullish analyst valuing it at ₹485 and the most bearish at ₹355 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 8.9% by the end of 2027. This indicates a significant reduction from annual growth of 7.5% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 16% annually for the foreseeable future. It's pretty clear that NTPC's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for NTPC. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at ₹422, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple NTPC analysts - going out to 2029, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 3 warning signs for NTPC you should be aware of, and 2 of them make us uncomfortable.
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