NTPC (NSE: NTPC) shares are up 4% today. The background appears to be that the results are going to arrive soon enough. Further, there’s been a flurry of activity in letting out contracts. Whether those are good enough reasons for a share price rise is another matter of course.
The upcoming results we can see from this announcement to the exchange: “This is to inform that in line with Clause 9 of the Code for Prevention of Insider Trading in the securities of NTPC read with the provisions of the Clause 4 of Schedule B of Regulation 9 of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 (as amended from time to time), Trading Window for dealing in the securities of the Company shall remain closed from 1st October, 2023 till 48 hours after the declaration of Unaudited Financial Results for the quarter ended 30.9.2023.” This doesn’t mean that we can’t trade the shares, it’s that insiders, who might know what those profits are going to be, cannot.
The other issue seems to be the letting of contracts. For example, commissioning a new power plant. Or in more detail: “NTPC is looking for opportunities to expand and diversify its business in new areas both domestically and globally by working in close coordination with the Indian and global energy community.” Although we might want to take that with the proverbial pinch of salt - many companies look to do those sorts of things, fewer succeed.
NTPC share price from Google Finance
We’ve looked before at NTPC: “As background while we might dismiss this all as a bit of politicking we really shouldn't do that with NTPC. Yes, they're carrying on doing the work of being an energy company. For example, there's the bid out for some GWs of pumped storage, which is something a decent electrical system could do well with. There's been a recent “golden crossover point” in the stock which is one of those chartist ideas about as relevant to real investing as astrology - the more people believe in it the more it works even if there's no objective truth there at all.
But the real point about NTPC is that it's an entirely political company. Not just because of the government holding in it. But because any electricity company is dependent upon the price at which it can sell electricity. Which is a politically determined price in India. Thus NTPC is forever under the thumb of politics, not markets. At which point, well, invest or not on the basis of that politics, not economics.”
We stand by that. Until there’s full and total liberalisation of the Indian electricity market NTPC is a political, not market, play.