NHPC Ltd

CMP: INR 45,
M.Cap.: INR 448bn
TP: INR 52

Company Background

National Hydro-Electric Power Corporation (NHPC) (Mini-Ratna Category-I) is one of the leading organizations in the field of hydropower development in the country, and has a 15% share of installed hydroelectric capacity. The organization is a hydroelectric power-generating business committed to the design, creation, and execution of an effective, integrated network of hydroelectric projects in India.

Why you should Buy!

They carry out every step of the development of hydroelectric projects, right from concept through project commissioning.

NHPC Limited presently has a 7,071.2 MW installation base spread over 24 power stations, including two joint venture projects.

The company also engages in the field of solar, wind power and project management, construction contract, and consultancy assignments services.

With its JVs and subsidiaries, NHPC is presently engaged in the construction of 16 projects aggregating to a total installed capacity of 10,515 MW.

Investment Rationale:

Increasing Demand for Renewable Energy Resources
Strong Investment in Research and Development

Outlook

NHPC is well-positioned to meet the growing demand for green energy. They have signed agreements with state governments to expand renewable energy usage. The company consistently pays dividends, with a recent yield of 4.0% in FY23. NHPC has a strong environmental, social, and governance (ESG) footprint due to its renewable energy production. Based on valuation, the target price is Rs. 52 with a 14% upside, leading to a “Buy” rating.