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NTPC commissions 500MW Unit VII of Korba station
NTPC commissioned the 500MW Unit VII of Korba Super Thermal Power Station (Korba)
on December 26, 2010. With the commissioning of Unit VII, the capacity at Korba stands
at 2,600MW. NTPC has a capacity of 33,194MW currently. Management has guided that
it would add 4,150MW and 6,500MW of capacity in FY2011E and FY2012E, respectively.
At the CMP, the stock is trading at 2.2x FY2012E book value. Considering its regulated
business model, with an assured return on equity and strong cash flow visibility, we have
assigned EV/MW of `5.25cr and P/BV of 2.2x on FY2012E estimates. We recommend Buy
on the stock with a Target Price of `230.
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