Shares of hydropower producer NHPC Ltd rose nearly 5% in arly deals on Monday after global brokerage CLSA assigned an outperform call to the multibagger stock. CLSA said decadal green growth for the company would be validated by FY24-29 regulations. It assigned a price target of Rs 120 to the NHPC stock, an upside of 41% against the previous close on BSE. The stock has risen for third straight session.
Th company is fast gaining share in hydro and new leading to emergence of faster growth avenues.
Its second biggest project, Lower Subansiri Hydro project and 60% of its REE growth over FY24-27C, should start in 4QFY25, said the global brokerage. In response, NHPC stock climbed 4.71% to Rs 88.82 on Tuesday on BSE. Market cap of the firm stood at Rs 88,255 crore. The power sector stock has surged 39% in a year and gained 112.25% in two years. It gained 267% in five years.
NHPC stock logged a turnover of Rs 18.74 crore with 21.42 lakh shares changing hands on BSE. The stock touched its record high of Rs 118.85 on July 15, 2024 and fell to its a 52-week low of Rs 58.35 on December 20, 2023.
On the other hand, JM Financial has a 'Buy' call on NHPC with a price target of Rs 108. The brokerage said the company is not keen into scaling up in renewables. The RoE of current RE projects is 6-7 per cent. All four units of 800 MW Parbati-II and three units of 2,000 MW Subansiri Lower are likely to commission by March 2025, the company management suggested. The Subansiri project is expected to be fully commissioned by May 2026, JM Financial said.
Ventura Securities target price indicates nearly doubling of NHPC share price over the next two years.
The brokerage has initiated coverage on NHPC with a 'Buy' rating, as it sees a strong capex-driven revenue growth outlook and scope for margin improvement.
While NHPC may appear expensive based on FY27 earnings projections, the majority of its 9.3 GW under-construction hydro projects are slated to become operational by FY28. Additionally, several projects totaling 8.3 GW, currently under survey, are anticipated to come online within the next 10 to 15 years, said Ventura.
NHPC Limited is engaged in the generation and sale of bulk power to various power utilities. The company’s other business activities include project management / construction contracts/ consultancy assignment services and trading of power. The company’s power stations include Salal, Dulhasti, Kishanganga, Nimoo Bazgo, Chutak, Baira Siul, Tanakpur, Dhauliganga, Rangit, Loktak, Indira Saga, Chamera - I, Uri - I, Chamera - II and Omkareshwa.