NTPC Q3 PAT rises 3%, but shares fall 3% on market sentiment

NTPC's shares dropped by nearly 3 per cent this morning, despite the company posting a 3.1 per cent year-on-year increase in standalone net profit for Q3 FY24. The stock initially fell to Rs 314.50 but later regained some ground to Rs 322.60. Despite this short-term decline, the long-term outlook remains positive, with several key financial indicators showing growth.

Q3 performance: Strong top-line growth

NTPC's standalone revenue for Q3 FY24 grew by 4.8 per cent YoY to Rs 41,352.3 crore, up from Rs 39,455 crore in the same period last year. The company's EBITDA surged 20.3 per cent YoY to Rs 11,960.6 crore, driven by operational efficiency, which helped the EBITDA margin improve to 28.9 per cent, compared to 25.2 per cent in Q3 FY23.

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Profit growth, but slight decline in consolidated earnings

On the profit front, NTPC reported a 3.1 per cent increase in its standalone net profit, which reached Rs 4,711.4 crore. However, on a consolidated basis, the net profit saw a slight dip to Rs 5,169.7 crore from Rs 5,208.87 crore in the same quarter of the previous year. The decline in consolidated profit was mainly due to higher tax expenses and adjustments.

Dividend announcement boosts sentiment

One of the highlights of NTPC's earnings report was the declaration of a second interim dividend of 25 per cent (Rs 2.5 per share) for FY25. The dividend payout will be made on February 18, 2025, with January 31, 2025, as the record date for eligibility. This positive news could provide some short-term support to the stock price.

Year-to-date performance and outlook

NTPC's stock has gained 4.71 per cent over the past year. However, in the last six months, it has fallen by 17.54 per cent, and the decline in the last three months has been even sharper at 21.38 per cent. Year-to-date, the stock is down by 2.97 per cent. This suggests that market sentiment has been cautious, despite the positive growth in earnings.

Analyst views: Mixed outlook

Some analysts remain optimistic about NTPC’s future, noting that the company’s operational efficiency and strong revenue growth are key positives. However, the stock's recent volatility reflects broader market concerns, including rising global trade tensions and investor uncertainty ahead of the upcoming Union Budget 2025.

NTPC’s robust quarterly performance, despite stock market volatility, underscores its resilience in a challenging environment. The focus will now shift to how the company navigates the upcoming fiscal policy changes and global economic conditions.