NTPC Ltd, formerly known as National Thermal Power Corporation Ltd, is an Indian public- sector undertaking (PSU), engaged in the business of generation of electricity and allied activities. It is a company incorporated under the Companies Act-1956 and is promoted by the Government of India (GoI). The headquarters of the company is located in New Delhi. NTPC’s core business is the generation and sale of electricity to state-owned power distribution companies and State Electricity Boards (SEBs) in India. The company also undertakes consultancy and turnkey project contracts that involve engineering, project management, construction management, and operation and management of power plants. The company has also ventured into oil and gas exploration and coal mining activities. It is the largest power company in India with an electric power generating capacity of 62,086MW. Although the company has approximately 16 per cent of the total national capacity contributes to over 25 per cent of total power generation due to its focus on operating its power plants at higher efficiency levels (about 80.2% against the national PLF rate of 64.5%). NTPC currently generates 25 billion units of electricity per month.
On the technical front, NTPC has higher highs and higher lows on the daily charts and is currently placed above the long-term EMAs in the daily frame. In the recent past, after clocking a low of Rs78 level, the stock has witnessed a bounce and rallied to the current levels. At the current juncture, the stock has formed a base of around Rs89 level on the lower side and is all set to move higher. The overall chart structure of the counter looks bullish from current levels and is witnessing a bounce from the support zone around Rs95-96 levels. This may trigger a fresh round of buying, which may take the stock towards Rs115 plus levels. The stock is currently performing in line with the broader markets indicating the inherent strength in the counter and is trading well above the major long-term support levels. On the Bollinger band (20,2), the stock price is trading above the mean with the upper band facing in the northward direction indicating the price likely to move higher. Analyzing the recent volume price action, the volumes have been encouraging in the recent up move indicating strong hands have started accumulating the stock at current levels. On the oscillator’s side, RSI (14) is trading in a comfortable zone of above 60 levels indicating the intact bullishness in the stock. We expect the counter to continue its outperformance in the coming trading days as well and may move towards Rs120 level in the medium-term. Any correction towards the recent support levels of Rs89 level may be utilized to average the positions.
Srinivas Krishnan Bobba, Deputy Manager (technical research analysis) Karvy Stockbroking Ltd