Citi has launched coverage on four prominent utility companies, issuing ‘Buy’ ratings while cautioning about potential challenges such as execution delays, weak demand, and regulatory risks that persist in the sector. The brokerage emphasized that valuations in the broader utility market are no longer considered ‘broadly cheap’, elevating the importance of balance-sheet quality and project execution.

Citi on NTPC: ‘Buy’

Citi has assigned a ‘Buy’ rating to NTPC with a target price of Rs 485, indicating a 22% upside from current levels. The firm identified NTPC as its top pick in the sector, noting that the company is well-positioned across thermal, renewable, storage, and nuclear opportunities.

The brokerage pointed out that NTPC’s regulated business is expanding, with a project pipeline significantly larger than in the past decade. Currently, NTPC has over 30 gigawatts under construction, including 16.5 gigawatts of coal-based capacity. The report highlighted that NTPC’s brownfield-heavy expansion strategy mitigates execution risks related to land acquisition, approvals, and connectivity.

Citi also mentioned NTPC’s increasing investments in renewables, storage, mining, and nuclear power, which are diversifying the company’s long-term asset profile beyond traditional thermal generation. NTPC aims to achieve a total installed capacity of 244 gigawatts by 2037, supported by cumulative group capital expenditure of nearly Rs 7 lakh crore by FY32.

The duration and diversity of its regulated business look set to extend meaningfully as it transitions from a regulated coal generator into an integrated energy platform.

Citi stated in its report. The brokerage noted NTPC’s advantage in funding large projects due to its scale and sovereign backing. Citi highlighted that the company’s regulated structure and pass-through cost mechanism provide a defensive earnings profile even if power demand temporarily weakens.

Stronger power demand can catalyse faster incremental thermal capacity awards and reduce risk of commissioning delays.

Citi added.

Citi on Tata Power: ‘Buy’

Citi has initiated coverage on Tata Power with a ‘Buy’ rating and a target price of Rs 525, reflecting a 19% upside. The brokerage stated that Tata Power is undergoing a multi-year transition, with an increasing share of lower-volatility businesses such as transmission, distribution, and renewables.

Tata Power’s transmission and distribution and renewable energy sectors now contribute over 60% of consolidated EBITDA. Citi also highlighted the Odisha distribution operations as a long-term regulated equity growth engine for the next five years.

According to Citi, Tata Power is poised to benefit significantly from future electricity distribution reforms and the adoption of rooftop solar. The company has bolstered its renewable positioning through captive cell and module manufacturing facilities with industry-leading yields. The report noted that the issues related to Mundra have largely been resolved, although supplementary power purchase agreements with some states are still pending.

Multi-year transition, with a growing share of lower-volatility businesses as capex stays focused on T&D and renewables.

Citi commented on its ‘Buy’ rating for the stock.

Citi on Power Grid Corporation: ‘Buy’

Citi initiated coverage on Power Grid Corporation of India with a ‘Buy’ rating and set a target price of Rs 380, indicating a 19% upside. The brokerage noted that the company is a direct beneficiary of India’s transmission grid expansion cycle.

The report highlighted that Power Grid Corporation currently has works-in-hand valued at Rs 1.48 lakh crore, nearly three times the level recorded at the end of FY23. Citi estimated that India’s transmission and distribution capital expenditure opportunity could reach nearly Rs 7.3 lakh crore between FY27 and FY36.

According to Citi, Power Grid Corporation aims for nearly 50% market share of the upcoming transmission pipeline. The brokerage also mentioned that the company’s commissioning and capital expenditure trajectory has significantly improved after a prolonged period of underinvestment in the grid network.

Direct beneficiary of transmission grid buildout in India. Commissioning and capex trajectories have improved.

Citi stated in its report. The brokerage projected that Power Grid Corporation could experience a substantial increase in annual capital expenditure intensity over the next decade compared to historical levels. Citi added that the company is one of the better long-term execution stories in the Indian utility sector due to its regulated earnings profile and strong project pipeline visibility.

Citi on JSW Energy: ‘Buy’

Citi initiated coverage on JSW Energy with a ‘Buy’ rating and a target price of Rs 650, suggesting nearly 16% upside. The brokerage noted that the company is well-positioned to benefit from both thermal and renewable power expansion.

Citi highlighted that JSW Energy’s long-term power purchase agreement-linked capacity could grow to 27.5 gigawatts from 13.3 gigawatts operational as of December 2025. Additionally, nearly 95% of the company’s earnings are expected to remain contracted, minimizing exposure to merchant power volatility.

According to the brokerage, JSW Energy has added approximately 2.5 gigawatts of thermal capacity through acquisitions over the past four years and continues to expand its renewable operations. Citi also mentioned that the company aims for a net debt-to-EBITDA ratio of around five times by 2030 while ensuring that new projects achieve mid-teen equity internal rate of return thresholds.

Well placed to benefit from both thermal and renewable buildout.

Citi remarked while initiating coverage on the stock. The brokerage concluded that steady renewable additions, thermal commissioning, and deleveraging after FY30 could support the company’s earnings trajectory in the medium term.

In summary, Citi’s latest assessments of the utility sector reflect a preference for companies linked to India’s expanding electricity infrastructure cycle. The brokerage maintains a positive outlook on businesses tied to thermal power, renewables, transmission, and storage, while cautioning that execution risks and valuation comfort will remain critical factors across the sector.

Disclaimer: The investment analysis and target prices presented in this report are based on brokerage research and do not constitute an offer or solicitation for the purchase or sale of any financial instrument. Equity investments carry market risks; please consult a SEBI-registered investment advisor before making any decisions based on these projections. Past performance and brokerage targets are not indicative of future results or guaranteed returns.