Synopsis:
PSU majors NTPC and Indian Oil Corporation (IOC) are in the limelight after reporting Q1FY26 results and receiving fresh brokerage views. CLSA maintained ‘Outperform’ on NTPC with a 35.2 percent upside, while Elara reiterated ‘Buy’ on IOC with a 35.3 percent upside, despite near-term earnings pressures.
Brokerages have turned their spotlight on select PSU stocks, highlighting robust upside potential despite recent earnings softness. CLSA and Elara Capital see 35 percent gains in NTPC Ltd and Indian Oil Corporation Ltd, respectively, citing capacity expansion, energy transition strategies, supportive government policies, and resilient margin outlooks as key drivers for future performance.
1. NTPC Ltd
NTPC Ltd, with a market capitalization of Rs. 3,29,250 crore, is India’s largest power producer. Along with its subsidiaries, associates, and joint ventures, the company is engaged in generation and sale of bulk power to state utilities. Its portfolio also extends to consultancy, project management, energy trading, oil & gas exploration, and coal mining.
Brokerage firm CLSA has maintained an ‘Outperform’ rating on NTPC with a target price of Rs. 459. Based on the closing price of Rs. 342 on August 20, 2025, this reflects a potential upside of 34.2 percent.
CLSA highlighted that NTPC has raised its FY32 capacity target to 149 GW, up 15 percent from 130 GW, driven by renewables and falling polysilicon prices. The brokerage also noted the company’s accelerated transition strategy, including carbon battery initiatives, forecasting a 45 percent EPS growth and 230 bps RoE growth over FY25–27.
In Q1FY26, sales declined 5.6 percent QoQ from Rs. 49,834 crore to Rs. 47,065 crore and fell 3.0 percent YoY from Rs. 48,529 crore. Net profit dropped 22.6 percent QoQ from Rs. 7,897 crore to Rs. 6,108 crore but rose 10.9 percent YoY compared to Rs. 5,506 crore.
2. Indian Oil Corporation Ltd
Indian Oil Corporation Ltd (IOC), with a market capitalization of Rs. 2,00,592.19 crore, is a Maharatna company under the Government of India. It operates across the hydrocarbon value chain, including refining, pipeline transportation, petroleum product marketing, R&D, exploration & production, natural gas, and petrochemicals. The company holds a leadership position in the oil refining and petroleum marketing sectors of India.
Brokerage firm Elara Capital has reiterated a ‘Buy’ rating on IOC while revising its target price downward by 10 percent to Rs. 193. Based on the closing price of Rs. 141.45 on August 20, 2025, the potential upside stands at 36.44 percent.
Elara cited crude oil staying below $70 per barrel in FY26, robust long term integrated margins at over Rs. 3,500 per tonne versus average of Rs. 2,900 per tonne in the past five years, and government compensation of Rs. 30,000 crore for FY26 LPG losses as supportive factors.
It added that OMCs may be allowed higher margins to fund energy transition capex but cut IOC’s earnings estimates for FY26, FY27, and FY28 by 7%, 8%, and 4%, respectively on weaker rupee and diesel margin concerns.
In Q1FY26, sales declined 1.5 percent QoQ from Rs. 1,95,270 crore to Rs. 1,92,341 crore and fell 0.8 percent YoY from Rs. 1,93,845 crore. Net profit dropped 18.7 percent QoQ from Rs. 8,368 crore to Rs. 6,808 crore but surged 82.8 percent YoY compared to Rs. 3,723 crore.
Written by: Manan
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