Is NTPC overvalued or undervalued?

As of 26 May 2025, the valuation grade for NTPC has moved from attractive to very attractive, indicating a strong improvement in its perceived value. The company is currently assessed as undervalued. Key ratios include a PE ratio of 13.78, an EV to EBITDA of 10.37, and a PEG ratio of 1.10, which suggest that NTPC is trading at a favorable valuation compared to its peers.
In comparison to its industry peers, NTPC's PE ratio is significantly lower than that of Power Grid Corporation at 17.73 and Adani Power at 16.55, both of which are considered very expensive. Additionally, NTPC's EV to EBITDA ratio of 10.37 is more attractive than Tata Power's 12.92. Despite NTPC's recent stock performance lagging behind the Sensex over the past year, its long-term growth potential remains strong, as evidenced by a 3-year return of 116.17% compared to the Sensex's 49.16%.