📌 At a Glance

NTPC Green Energy Ltd is the hottest PSU kid on the block — massive solar plans, ₹92,000 Cr market cap, and margins that would make Apple blush. But behind the 90% OPM lies a debt bomb, zero dividends, and a valuation from Mars (P/E 195). Is this the next green goldmine or another overhyped sun-chaser?

1️⃣ Business Model – Renewable, Profitable (on Paper)

NTPC Green Energy is the green-energy arm of NTPC, India’s largest power producer. It was born in 2022 and already claims:

• India’s largest non-hydro PSU renewable energy platform
• Operates 2.2 GW+ capacity of solar + wind
• Has ~13.9 GW of projects under construction
• Signs long-term PPAs with SECI, DISCOMs, and nodal agencies

They’ve gone from ₹170 Cr sales in FY23 to ₹2,210 Cr in FY25 — that’s 13x in 2 years. Impressive… or just capital-intensive speedrunning?

2️⃣ Financials – Topline Exploding, But Look Deeper

💣 Interest: ₹761 Cr
💀 Depreciation: ₹758 Cr
🚀 EPS: ₹0.56 (Stock is ₹110)

3️⃣ Balance Sheet – Growth on Steroids, Funded by Loans

• Borrowings: ₹19,441 Cr (Up 3x in 2 years)
• CWIP: ₹13,983 Cr → You’re paying today for plants that go live 2–3 years later
• Fixed Assets: ₹21,816 Cr
• Total Assets: ₹45,421 Cr

Cash flows are break-even-ish, relying entirely on funding — not operations — to fuel this rocket.

4️⃣ Valuation – Green Bubble Alert?

• P/E: 195
• P/B: 5.04
• EV/EBITDA: absurd
• Dividend Yield: 0%

Compare that to Adani Green at P/E 92 and JSW Energy at P/E 45 — NTPC Green is priced like a tech unicorn but runs like a public-sector power utility.

🧮 Fair Value Range (EduEstimate): ₹45–60
Assuming ~₹600 Cr steady PAT with 25–30x P/E (generous for a PSU with weak cash flow).

5️⃣ Positives – Because Hope is a Renewable Resource

• 💡 Clean energy tailwinds — Govt targets 500 GW by 2030
• 🔌 Visibility of revenue via long-term PPAs
• 🏗️ 13.9 GW under construction
• 🌞 Khavda Solar Project (1,255 MW) already kicking off
• 📉 Debtor Days: Improved from 700 → 85
• ⭐ AAA-rated debt — because… NTPC parent.

6️⃣ Risks – Not So Green Underneath?

• 🧾 Massive Capex = Massive Debt — Rising faster than revenue
• 📉 Low ROE, low ROCE → Business might scale, but returns won’t
• 📊 Interest eats half of EBIT
• 🔋 Solar project delays are frequent in India
• 🧠 195x earnings = zero margin of safety
• 🧍‍♂️ Promoter Holding: 89% → Free float is limited, which adds volatility

7️⃣ Final Thoughts – NTPC Green: Solar-Powered, Debt-Fueled

There’s no doubt NGEL is the cleanest-looking PSU on the outside — booming topline, expanding capacity, and 90% margins. But it’s also a high-risk, high-debt, low-yield, slow-ROE bet — trading like it’s Tesla India.

Want long-term exposure to renewable energy? Sure, this is a good pick.
Want valuation comfort or cash flows? Move along.

At P/E 195, even sunlight costs extra.

✍️ Written by Prashant | 📅 20 June 2025

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