Power generation in India has been falling with shrinking industrial production.
This has prompted some investors to wonder if it makes sense to own stocks of power generating companies. As a result, stocks such as NTPC have taken a pounding in the past six months. The stock has fallen nearly 20 per cent since BusinessLine’s last ‘buy’ call in May 2019.
But the fall in the stock price presents a good buying opportunity for investors with a long-term perspective.
The current dividend yield is a healthy 4.7 per cent. Besides, the stock is trading at a 12-month trailing price-to-earnings multiple of about eight times, below its three-year average multiple of about 11.5 times.
The company’s fundamentals and its long-term business prospects seem sound.
Also, many of its under-construction projects are expected to come on stream in the next few years; this should add to earnings growth.
Several factors have weighed on the NTPC stock over the past few months. One, its electricity generation fell 3.2 per cent y-o-y to 145.3 billion units in the first half of FY20.
Denne historien er fra December 30, 2019-utgaven av The Hindu Business Line.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
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Denne historien er fra December 30, 2019-utgaven av The Hindu Business Line.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
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