Understanding the Current Rating
MarketsMOJO’s 'Hold' rating for NTPC Ltd. indicates a balanced stance on the stock, suggesting that investors should maintain their current positions rather than aggressively buying or selling. This rating reflects a combination of factors including the company’s quality, valuation, financial trend, and technical indicators. The rating was revised from 'Sell' to 'Hold' on 14 February 2026, following an improvement in the company’s overall Mojo Score from 48 to 65 points, signalling a more stable outlook.
Quality Assessment
As of 27 February 2026, NTPC Ltd. holds an average quality grade. The company’s ability to generate returns on capital employed (ROCE) remains modest, averaging 8.24%, which points to relatively low profitability per unit of capital invested. This is further underscored by a high Debt to EBITDA ratio of 4.81 times, indicating a significant debt burden that constrains long-term growth prospects. Operating profit has grown at an annual rate of 9.17% over the past five years, reflecting steady but unspectacular expansion. These factors collectively temper the company’s quality rating, suggesting that while NTPC is a stable entity, it faces challenges in delivering robust growth and profitability.
Valuation Perspective
NTPC Ltd. is currently viewed as attractively valued. The stock trades at an Enterprise Value to Capital Employed ratio of 1.4, which is below the historical average for its sector peers, signalling a discount in valuation terms. This valuation attractiveness is supported by a Return on Capital Employed of 8.1% as of the latest half-year results, which, while modest, is sufficient to justify the current price level. Additionally, the company’s Price/Earnings to Growth (PEG) ratio stands at 1.5, indicating a reasonable balance between earnings growth and valuation. Investors looking for value within the power sector may find NTPC’s current price appealing given these metrics.
Financial Trend and Returns
The financial trend for NTPC Ltd. is characterised as flat, reflecting stable but unspectacular performance. The company’s operating results for the December 2025 half-year were largely unchanged, with a ROCE of 9.09%, the lowest in recent periods. Despite this, the stock has delivered positive returns over various time frames as of 27 February 2026: a 1-month gain of 10.55%, a 3-month increase of 16.61%, and a 1-year return of 20.84%. Profit growth over the past year has been moderate at 10%, supporting the stock’s steady appreciation. These figures suggest that while earnings growth is not accelerating rapidly, the market has responded favourably to the company’s consistent performance.
Technical Outlook
From a technical standpoint, NTPC Ltd. exhibits a bullish grade. The stock’s price action over recent months has shown resilience and upward momentum, with a year-to-date gain of 15.81% and a 6-month return of 14.49%. The technical strength supports the 'Hold' rating by indicating that the stock is maintaining positive momentum, though it may not yet be positioned for a strong breakout. Investors monitoring technical signals may view the current trend as a sign of stability and potential for gradual appreciation.
Additional Considerations
NTPC Ltd. is a dominant player in the power sector, with a market capitalisation of approximately ₹3,70,461 crores, making it the largest company in its industry segment. It accounts for 21.23% of the sector’s market cap and generates annual sales of ₹1,87,530.56 crores, representing 34.45% of the industry total. Institutional investors hold a significant 45.56% stake in the company, reflecting confidence from well-resourced market participants who typically conduct thorough fundamental analysis. This institutional backing adds a layer of stability to the stock’s outlook.
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What the Hold Rating Means for Investors
For investors, the 'Hold' rating on NTPC Ltd. suggests a cautious but steady approach. The stock is neither a compelling buy nor a sell candidate at present. Its attractive valuation and positive technical momentum provide reasons to maintain exposure, while the average quality and flat financial trend advise prudence. Investors should consider holding their current positions and monitor the company’s debt management and profitability improvements for potential future upgrades. The rating reflects a balanced risk-reward profile, suitable for those seeking stable income and moderate capital appreciation within the power sector.
Summary
In summary, NTPC Ltd.’s current 'Hold' rating by MarketsMOJO, updated on 14 February 2026, is supported by a combination of average quality, attractive valuation, flat financial trends, and bullish technical indicators as of 27 February 2026. The company’s strong market position and institutional backing further reinforce this stance. Investors should view this rating as a signal to maintain their holdings while keeping an eye on future developments in profitability and debt servicing capacity.
Looking Ahead
Going forward, NTPC Ltd.’s ability to improve its debt metrics and accelerate profit growth will be key factors influencing its rating and market performance. The power sector’s evolving dynamics, including regulatory changes and shifts towards renewable energy, may also impact the company’s outlook. Investors are advised to stay informed on these developments and reassess their positions accordingly.
Final Thoughts
Overall, NTPC Ltd. presents a stable investment opportunity with moderate growth prospects and a valuation that offers some margin of safety. The 'Hold' rating reflects this balanced view, encouraging investors to maintain their current exposure while remaining vigilant to changes in the company’s fundamentals and market conditions.
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