Profitability also benefited from higher incentives. NTPC saw an improvement in fixed-cost under-recoveries, narrowing to ₹470 crore in Q3 from ₹760 crore at the end of the second quarter. These are expected to drop below ₹300 crore by FY25-end. Expected lower under-recoveries and higher plant load factor (PLF) incentives are likely to bolster Q4 performance.

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Yet, NTPC faces a tough task of meeting the execution timeline with 30 GW of projects under construction, including those being executed by its subsidiaries and joint ventures.

“The ordering for thermal projects is progressing; however, with bunching of projects we remain cautious on capacity addition in FY25 and FY26,” said a JM Financial Institutional Securities report on 26 January. The projects, including over 10 GW of renewable energy (RE) being undertaken through its subsidiary, NTPC Green Energy Ltd, would increase its total installed capacity by 40%, with its share of RE going up to 13% from under 5%.

Still, capacity addition progress remains slow. For the first nine months of FY25 (9MFY25), only 0.64 GW was added against a 7 GW target for the year. NTPC’s management expressed confidence during the earnings call about meeting the target, with the bulk of execution planned for Q4. Yet, analysts remain cautious.

Antique Stock Broking has cut earnings estimates for FY25-27, factoring in muted Q3 demand and a one-quarter shift in the timeline of capacity addition.

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The company is also investing ₹33,000 crore to install flue-gas desulphurization in its older plants to remove sulphur dioxide from the exhaust gas and reduce air pollution. Newer plants are already equipped with this system.

Capex for 9MFY25 was up 44% year-on-year to ₹31,000 crore. The company’s net debt-equity ratio was 1.32x at Q3-end, marginally lower than 1.43x in H1. JM Financial projects this to stay at about 1.2x over the next two years thanks to strong cash flows.

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NTPC’s shares are down about 30% from their 52-week highs of ₹448.45 on 30 September. While valuations may have tapered, there are execution risks, which may prompt earnings downgrades. Thus, timely project delivery is crucial for driving stock performance.