The NHPC share price is on a distinctive upward trajectory. The stock is up almost 11% in the last 5 days. This PSU stock has seen significant upmove after a positive recommendation from international brokerage house, NHPC.
Here is a quick look at all the buzz around the stock-
CLSA on NHPC: Share price to double in 4 years
CLSA has upgraded its recommendation on NHPC to ‘High Conviction Outperform’. According to the brokerage, the “25% stock correction (in 6 months) gives investors an inexpensive (12x FY27CL PE) opportunity to accumulate India’s #5 clean, green power utility.”
CLSA forecasts NHPC’s “REE (ex-minority) growth of 113% over FY24-29 compared to 2% growth over the past five years.” With a step-change in REE, they are also forecasting “79% higher EPS.” They believe NHPC’s return on equity could expand to 512bps over FY25-27 and based on those valuations, the “stock could double in four years.”
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CLSA lists out the key positive catalysts for NHPC and added that the “start of the Parbati 2 hydro project, its entry into shorter-duration regulated pump storage and a likely 2x in regulated equity over FY24-28 as large projects reach fruition will drive EPS” growth. According to them, the “renaissance in hydro power with India announcing net zero and slew of new project awards to NHPC are rerating catalysts.” CLSA has revised the target price lower to Rs 117 per share from Rs 120/share.
Faster growth avenues for NHPC
While NHPC has 15% of India’s hydro capacity, it has 67% share in under- construction projects. This according to CLSA will help drive “strong EPS growth for the company. Its natural entry into PSPs, with a likely 3GW in projects being viable, should see them implemented by FY32. This will drive a faster conversion of capital into regulated equity utilising latent potential from its hydro projects.”
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In a recent exchange filing, NHPC clarified its stance on buying promoter stake in PTC. According to CMD Raj Kumar Chaudhary, “NHPC to shortly decide upon buying co-promoters stake in PTC” The exchange filing further stated that,
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