The outlook is changing after the surge in the stock market in the last two trading sessions. After a correction phase, the market is in reversal mode. On Monday, Nifty started trading above 24300, which is a sign of its strength.

There was a big decline in PSU stocks in the correction phase in the market and PSU stocks like HAL and Cochin Shipyard fell by 30 to 35 percent from their high level. Now in this recovering market, along with investors, analysts have also started paying attention to PSU stocks.

The big PSU stock of the power sector NTPC Ltd is in the eyes of investors. On Monday, this stock was trading at the level of Rs 373.30 with a gain of 2.22 percent. Its market cap is Rs 3.62 lakh crore.

Brokerage firm Bernstein is bullish on government company NTPC. It has maintained an outperform rating on the top PSU stock for a gain of about 17 percent.

The brokerage said that strong power demand and NTPC's cost of debt advantage are the key factors for the increase. The brokerage does not see any significant upside beyond this and neither does it see any downside risk.

Boosting NTPC's prospects is its renewable energy branch NTPC Green Energy, which recently launched a Rs 10,000 crore IPO. The IPO was subscribed 2.42 times. NTPC Green Energy is a 'Maharatna' PSU. It has a renewable portfolio of solar energy and wind energy assets, reflecting NTPC's focus on green energy expansion.
 

NTPC Share Price Target

Bernstein said NTPC shares are currently valued at 16 times FY25 earnings and 10 times EV/EBITDA, which is in line with global competitors. The brokerage has set a target of Rs 440 on it, which means the PSU stock can give a return of up to 17 percent from the current market price.

NTPC is a public sector undertaking owned by the Ministry of Power. It is engaged in power generation and other activities.

NTPC shares have given a positive return of 20 percent so far in 2024 and 47 percent in the last one year. The PSU stock has jumped 120 percent and 176 percent respectively in two and three years.