NTPC FY27 Dividend to Hit Record Despite EPS Dip

NTPC Ltd. is poised for an unusual financial trajectory in fiscal year 2027, with its earnings per share (EPS) anticipated to fall by 6.6% to Rs 26.07. Despite this projected decline, the power producer’s dividend is forecast to reach a new historical high, increasing by 4.7% to Rs 9.42 per share.

Divergent Financial Paths

This forecast presents a notable contrast to past trends. The only other instance in the historical data (FY18-FY26) where NTPC’s EPS declined was in FY20, a year that also saw the dividend miss Bloomberg’s estimates.

• FY27 Projected EPS: Rs 26.07 (down 6.6%)
• FY27 Projected Dividend: Rs 9.42 (up 4.7%)
• FY26 Dividend: Rs 9

Payout Ratio’s Influence

The expected increase in dividend, even with falling EPS, stems from an anticipated rise in NTPC’s payout ratio. This ratio is estimated to climb to 36.11% in FY27 from 32.26% in FY26, driving the higher payout.

• FY27 Payout Ratio: 36.11%
• FY26 Payout Ratio: 32.26%
• Three-Year Dividend Growth (Bloomberg): 6.70%
• Projected 12-Month Dividend Yield: 2.82%
• Five-Year Average Yield: 2.52%

While higher than FY26, the FY27 payout ratio remains below levels seen in earlier years, specifically FY18, FY19, FY21, FY22, and FY23. Bloomberg data also indicates a consistent three-year dividend growth of 6.70%.

Analyst Consensus and The Road Ahead

The projected Rs 9.42 dividend is a consensus forecast derived from 17 analyst estimates, with individual projections ranging from Rs 7.36 to Rs 11.30. This range underscores a degree of uncertainty surrounding the final payout.

The central question for FY27 remains whether NTPC can successfully buck its historical trend, delivering a higher dividend even as its earnings per share experience a decline.