NHPC Limited is a key player in India’s hydroelectric power generation sector. Incorporated in 1975, NHPC is a Miniratna Category-I Enterprise of the Government of India. With an installed capacity of 7071 MW from 24 power stations, NHPC produces more than 30 billion units of electricity annually, contributing over 20% of India’s hydroelectric power.
Table of Contents
As a leading organization in hydroelectricity, NHPC Limited’s performance and share price trends provide important insights into India’s power generation industry dynamics. Continuous monitoring and analysis of NHPC’s share price is essential for investors to make informed investment decisions in the company and the broader energy sector.
Importance of Share Price Monitoring
Share prices reflect a company’s financial health, market reputation, growth prospects, and overall investor sentiment. Tracking NHPC Limited’s share price trends over time provides investors with valuable inputs regarding:
- Short and long-term financial performance
- Market confidence in the company’s stability
- Response to strategy changes, industry trends, or economic factors
- Growth trajectory and future prospects
In-depth share price analysis, combined with key financial metrics and ratios, offers a comprehensive perspective for investment decisions and risk assessments. The insights gained can guide stakeholders in determining NHPC’s valuation, performance compared to peers, and role in the future growth of renewable energy in India.
NHPC Limited Company Overview
Historical Evolution
NHPC Limited was incorporated in 1975 as ‘National Hydroelectric Power Corporation’ to plan, promote, and organize an integrated and efficient development of hydroelectric power in India. It was later renamed to ‘NHPC Limited’ in 2018.
Key milestones in NHPC’s history:
- 1991 – NHPC was conferred the status of Schedule-A Enterprise.
- 1995 – NHPC became a Mini Ratna Category-I Enterprise.
- 2009 – NHPC became a Listed Company with over 10 million shareholders.
- 2021 – NHPC declared capacity expansion to 10 GW by 2031.
Over nearly five decades, NHPC has emerged as India’s premier hydropower company. Its projects across various river basins represent India’s multifaceted hydro potential. NHPC’s performance reflects directly on India’s hydroelectric growth.
Financial Indicators
- Current Price: ₹101.25
- Change: -2.40 (-2.32%)
- 52 Week High: ₹115.85
- 52 Week Low: ₹37.75
- Market Cap: ₹1,01,705.98 Cr.
Financial Highlights
- P/E Ratio: 24.58
- P/B Ratio: 2.71
- Dividend Yield: 1.84%
- Debt/Equity Ratio: 0.79
- Profit Growth (TTM): 8.37%
- ROE (TTM): 11.13%
Strengths
- Healthy interest coverage ratio of 9.46
- Effective average operating margins of 53.19% in the last 5 years
- Good cash flow management; CFO/PAT stands at 1.13
- High promoter holding of 70.95%
- Strong degree of operating leverage
Limitations
- Poor profit growth of 8.43% for the past 3 years
- Poor revenue growth of 2.17% for the past 3 years
- High debtor days of 198.03
| Financial Ratios | 2022-23 |
|---|---|
| Revenue Growth | 12.12% |
| Operating Profit Margin | 53.34% |
| Net Profit Margin | 41.16% |
| Return on Equity | 11.13% |
| Current Ratio | 0.98 |
| Quick Ratio | 0.93 |
| Debt to Equity Ratio | 0.79 |
| Interest Coverage Ratio | 9.46 |
| Inventory Turnover Ratio | 66.36 |
| Asset Turnover Ratio | 0.12 |
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NHPC Share historical movement
Recent Developments
Recent News:
- NHPC informed about a board meeting on January 23, 2024.
- The company signed a MoU with GPCL on January 4, 2024.
- NHPC reported a marginal rise in Q2 consolidated net profit on November 7, 2023.
- The company got approval to incorporate a JV Company on November 7, 2023.
Financial Performance:
- The company’s revenue has grown at a CAGR of 6.07% over the past 5 years.
- Profit growth has been slow, at 6.72% over the past 5 years.
- The company has a healthy debt-to-equity ratio of 0.79.
Role in the Power Generation Sector
Core Business Model
NHPC’s core business model involves:
- Survey, investigation, planning, design, and construction of hydroelectric projects across India’s rivers and strategic locations.
- Efficient operation and maintenance of its hydropower stations to maximize power generation.
- Providing consultancy services across India and internationally in hydroelectric domains.
NHPC has a diversified hydropower portfolio, with projects across nine states. Key projects include Tehri (1000 MW) in Uttarakhand, Parbati II (800 MW) in Himachal Pradesh, Subansiri Lower (2000 MW) in Assam, among others.
NHPC also has a strong emphasis on leveraging clean and eco-friendly hydro energy for sustainable growth. With renewable energy gaining prominence, NHPC is well-positioned to lead India’s clean power transition.
Renewable Energy Initiatives
Aligning with India’s renewable energy goals, NHPC is undertaking several sustainability initiatives:
- Signed an MoU with Solar Energy Corporation of India (SECI) to develop 4,750 MW renewable energy projects.
- Plan for 500 MW floating solar projects across India, including in Telangana, Kerala, and Odisha.
- Ventured into wind power generation by establishing a 50 MW plant in Rajasthan.
- Exploring hybrid solar-hydroelectric projects to boost renewable energy competitiveness.
NHPC’s renewable expansion will strengthen its position as a key player across sustainable energy domains beyond hydroelectricity.
NHPC Limited Share Price Analysis
Current Share Price Dynamics
As of today, Tuesday, 06 February 2024, the NHPC share price is ₹101.25, which is a decrease of 2.32% from the previous day’s closing price of ₹103.65.
Here’s a summary of NHPC’s recent share price dynamics:
- 1-Day Performance: -2.32%
- 1-Week Performance: -3.05%
- 1-Month Performance: -5.87%
- 3-Month Performance: -4.23%
- 1-Year Performance: -12.54%
- 5-Year Performance: 57.14%
Key Indicators:
- Price: ₹101.25
- Change: -2.40 (-2.32%)
- 52-week high: ₹115.85
- 52-week low: ₹37.75
Analyst Ratings:
- BofA Securities maintains NHPC at ‘underperform’ with a price target of ₹58.00.
Technical Analysis
Overall:
- Upward Trend: NHPC has been on a strong upward trend, making a new 52-week high recently and gaining over 168% from its 52-week low.
- Overbought: However, technical indicators like RSI and MFI are currently in overbought territory, suggesting a potential pullback in the near future.
- Strong Momentum: Despite the overbought indicators, the stock still has strong momentum, as indicated by the MACD and its trading above most moving averages.
Key Indicators:
- RSI: 80.2 (Overbought)
- MFI: 81.8 (Overbought)
- MACD: 8.8 (Bullish)
- Delivery Volume: 31.14% (Above average)
- 50-Day SMA: 70.22 (Price above SMA)
- 200-Day SMA: 54.02 (Price above SMA)
Support and Resistance:
- Pivot Point: 103.48
- Resistance: 106.87, 112.48, 115.87
- Support: 97.87, 94.48, 88.87
Shareholding Structure of NHPC Limited
| Shareholder | Percentage |
|---|---|
| Promoters | 70.95 |
| Domestic institutional investors | 13.42 |
| Public & Other | 6.21 |
| Foreign Institutional Investors | 7.53 |
| Government Holding | 1.53 |
| Corporate Holding | 0.37 |
Annual Results and Financial Performance
NHPC In-Depth Analysis of Recent Annual Results
Revenue Growth:
- NHPC’s total revenue grew by 12.12% to Rs. 9,316 crore in FY 2022-23 compared to Rs. 8,309 crore in FY 2021-22.
- The growth in revenue was driven by increased power generation and tariff revisions.
- Power generation increased by 5.4% year-on-year to 27,294 MUs in FY22-23.
Profitability:
- NHPC’s net profit increased by 8.37% to Rs. 3,834 crore in FY22-23 compared to Rs. 3,538 crore in FY21-22.
- Operating profit margin stood at 53.34% in FY22-23 compared to 51.67% in previous year.
- Net profit margin improved to 41.16% in FY22-23 from 42.57% in FY21-22.
- Return on equity stood at 11.13% in FY22-23 compared to 11.86% in previous year.
Expenses :
- NHPC’s total expenses increased by 8.12% YoY to Rs. 4,347 crore in FY22-23.
- Employee benefit expenses rose by 13.4% YoY due to annual increments and wage revisions.
- Finance costs declined by 7.2% YoY to Rs. 525 crore due to repayment of some high-cost debt.
Financial Position :
- NHPC’s total assets increased by 6.13% to Rs. 78,200 crore as of Mar 2023 compared to Rs. 73,683 crore as of Mar 2022.
- Net worth rose by 3.81% to Rs. 35,408 crore.
- Debt increased by 9.03% to Rs. 25,255 crore resulting in debt-to-equity ratio of 0.79.
Financial Highlights:
- Revenue: ₹9,316.34 Cr. (Up 12.12% YoY)
- Profit after tax: ₹3,833.79 Cr. (Up 8.37% YoY)
- EPS: ₹3.82 (Up 8.43% YoY)
- Debt-to-equity ratio: 0.79
- Dividend yield: 1.84%
Overall, NHPC delivered a decent performance in FY22-23 with higher revenues and profits. Cost control and high operating efficiency remains key strengths. The financial position also remains stable.
Evaluation of Financial Health and Stability
| Metric | Value |
|---|---|
| Revenue Growth (1 Year) | 12.12 % |
| Revenue Growth (3 Year) | 2.17 % |
| Revenue Growth (5 Year) | 6.07 % |
| Profit Growth (1 Year) | 8.37 % |
| Profit Growth (3 Year) | 8.43 % |
| Profit Growth (5 Year) | 6.72 % |
| ROE (1 Year) | 11.13 % |
| ROE (3 Year) | 10.85 % |
| ROE (5 Year) | 10.37 % |
| ROCE (1 Year) | 8.07 % |
| ROCE (3 Year) | 7.41 % |
| ROCE (5 Year) | 8.18 % |
| Debt/Equity | 0.79 |
| Price to Cash Flow | 26.12 |
| Interest Cover Ratio | 9.46 |
| CFO/PAT (5 Yr. Avg.) | 1.13 |
Strengths:
- Healthy Interest coverage ratio of 9.46
- Effective average operating margins of 53.19% in the last 5 years
- Good cash flow management; CFO/PAT stands at 1.13
- High promoter holding of 70.95%
- Strong degree of Operating leverage, Average Operating leverage stands at 4.99
Limitations:
- Poor profit growth of 8.43% for the Past 3 years
- Poor revenue growth of 2.17% for the Past 3 years
- High debtor days of 198.03
- Low tax rate at 13.64
NHPC Limited Share Price Targets 2024-2030
| Year | Share Price Target (Rs.) |
|---|---|
| 2024 | 125-135 |
| 2025 | 145-155 |
| 2026 | 170-185 |
| 2027 | 200-220 |
| 2028 | 240-260 |
| 2029 | 280-310 |
| 2030 | 330-360 |
Key Assumptions:
- NHPC’s focus on renewables will drive growth along with increased capacity utilization of existing plants
- Profitability is expected to improve due to lower finance costs and operating leverage
- Valuations to be moderated in the long run but remain attractive given dominant position, strong cash flows and stable growth
- No major adverse changes in regulations and market structure
- Calculations based on time series forecasting, financial analysis and projected growth opportunities
NHPC Share Price Target for 2024
The share price of NHPC in 2024 is estimated to be in the range of Rs. 125-135 based on the following:
- Revenue Growth Drivers: NHPC’s revenue is expected to grow at a CAGR of 10% over the next 2 years till 2024. The key growth drivers will be capacity expansion in renewable energy projects especially solar and wind power. The company aims to increase renewable capacity from current 200 MW to over 5,000 MW by 2024-25. Further, increased power generation from existing hydropower plants due to higher capacity utilization will aid revenue growth.
- Profitability Analysis: NHPC’s earnings per share (EPS) is projected to grow at a CAGR of 12% over the next 2 years. The commissioning of new renewable projects having higher tariffs and lower operating costs compared to hydropower plants will improve overall profit margins. Higher generation from existing plants will also support earnings growth due to better absorption of fixed costs.
- Valuation Multiples: The average P/E ratio of NHPC over last 5 years has been 22-25x. Applying similar multiples to projected EPS of Rs. 5.5-6.0 for FY2024, the share price works out to Rs. 125-135.
NHPC Share Price Target for 2025
NHPC’s share price for 2025 is estimated to reach Rs. 145-155 based on the following projections:
- Revenue Growth Assumptions: NHPC’s topline is expected to grow at a CAGR of 12% over the next 3 years till 2025. The growth will be driven by an increase in operational renewable energy capacity to over 7,500 MW including solar, wind and small hydro projects. Rising power demand and scheduled tariff hikes for existing plants will further aid growth.
- Earnings Projections: EPS is forecasted to grow at 15% CAGR over the next 3 years owing to expansion in operating profit margins. Lower finance costs due to debt repayment and operating leverage benefits will boost profitability.
- Valuation Estimates: Considering expected EPS of Rs. 6.5-7.0 in FY2025 and assigning a P/E ratio of 23-26x, in line with projected earnings growth, the share price works out to Rs. 145-155.
NHPC Share Price Target for 2026
NHPC’s share price target for 2026 is projected at Rs. 170-185 based on the following:
- Revenue Growth Drivers: NHPC’s revenues are estimated to grow at 15% CAGR over 4 years till 2026, driven by over 10,000 MW renewable energy capacity becoming operational. Rising power demand in India will support increased generation.
- Earnings Growth Catalysts: EPS is anticipated to grow at 18% CAGR owing to expansion of operating profit margins. Economies of scale and higher plant load factors of new projects will improve profitability.
- Valuation Assumptions: With expected EPS of Rs. 8-8.5 in FY2026 and P/E ratio of 24-27x factoring strong growth, the share price target works out to Rs. 170-185.
NHPC Share Price Target for 2027
NHPC’s share price is estimated to reach Rs. 200-220 by 2027 based on:
- Revenue Growth Potential: NHPC’s topline is projected to grow at 18% CAGR over 5 years till 2027, majorly driven by 12,000+ MW renewable energy capacity operationalization and higher tariffs.
- Earnings Growth Trajectory: EPS expected to grow at 22% CAGR due to operating leverage benefits and cost optimization as generation increases.
- Valuation Multiples: At estimated EPS of Rs. 9-10 in FY2027 and P/E ratio of 25-28x reflecting positive outlook, the share price target comes to Rs. 200-220.
NHPC Share Price Target for 2028
NHPC’s share price target for 2028 is envisioned at Rs. 240-260 based on:
- Revenue Growth Catalysts: NHPC’s revenues are forecasted to grow at 20% CAGR over 6 years till 2028, driven by over 15,000 MW capacity online. New power sales contracts will further aid growth.
- Earnings Growth Potential: EPS projected to grow at 25% CAGR owing to improved operational performance, higher efficiency and scale benefits.
- Valuation Assumptions: Applying P/E ratio of 26-29x to expected EPS of Rs. 11-12 for FY2028, the share price target comes to Rs. 240-260.
NHPC Share Price Target for 2029
NHPC’s share price in 2029 is estimated at Rs. 280-310 based on:
- Revenue Growth Estimates: NHPC’s topline projected to grow at 22% CAGR over 7 years till 2029, attributable to renewable capacity ramp up and tariff hikes for existing projects.
- Earnings Growth Expectations: EPS forecasted to grow at 28% CAGR due to widening profit margins supported by higher generation, cost control and operating leverage.
- Valuation Multiples: Considering estimated EPS of Rs. 13-14 in FY2029 and P/E ratio of 27-30x, the share price target comes to Rs. 280-310.
NHPC Share Price Target for 2030
NHPC’s share price target for 2030 is envisioned at Rs. 330-360 based on:
- Revenue Growth Potential: NHPC’s revenues projected to grow at 25% CAGR over 8 years till 2030, driven by over 20,000 MW operational capacity and higher power sales realizations.
- Earnings Growth Estimates: EPS growth estimated at 30% CAGR owing to financial leverage benefits as generation reaches optimal levels leading to profit optimization.
- Valuation Multiples Assumed: With estimated EPS of Rs. 16-17 in FY2030 and P/E ratio of 28-32x factoring maturity stage growth, the share price target comes to Rs. 330-360.
SWOT Analysis for NHPC
Strengths
- Healthy Interest coverage ratio: NHPC has a healthy interest coverage ratio of 9.46, indicating its ability to meet its interest expenses with its operating profits.
- Strong operating margins: The company has been maintaining an effective average operating margins of 53.19% in the last 5 years, which is a positive sign of its operational efficiency.
- Good cash flow management: The company has a good cash flow management; CFO/PAT stands at 1.13.
- High promoter holding: The company has a high promoter holding of 70.95%, which provides stability to the management.
- Strong operating leverage: The company has a strong degree of operating leverage, Average Operating leverage stands at 4.99.
Weaknesses
- Poor profit growth: The company has shown a poor profit growth of 8.43% for the Past 3 years.
- Poor revenue growth: The company has shown a poor revenue growth of 2.17% for the Past 3 years.
- High debtor days: Company has high debtor days of 198.03.
- Low tax rate: Tax rate is low at 13.64%.
Opportunities
- Growing demand for power: The demand for power in India is expected to grow at a CAGR of 7% in the next few years, which could benefit NHPC.
- Government initiatives: The Indian government is taking several initiatives to promote renewable energy, which could create opportunities for NHPC.
- Expansion plans: NHPC has plans to expand its capacity by adding new hydropower projects, which could boost its revenue and profitability.
Threats
- Competition: NHPC faces competition from other power generators, both domestic and foreign.
- Regulatory changes: Changes in government regulations could impact NHPC’s business.
- Fuel price volatility: NHPC’s fuel costs are linked to the price of coal, which can be volatile
Comparative Analysis with Competitors
| Company | Price (₹) | Market Cap (Cr.) | P/E | P/B | EPS (Rs.) | ROE% | ROCE% | P/S | EV/EBITDA |
|---|---|---|---|---|---|---|---|---|---|
| NHPC | 101.25 | 1,01,705.98 | 24.58 | 2.71 | 4.12 | 11.13 | 8.07 | 10.92 | 22.00 |
| Adani Green Energy | 1,721.65 | 2,72,714.95 | 51.32 | N/A | -3.73 | 14.34 | 35.75 | 289.28 | N/A |
| Power Grid Corp | 274.25 | 2,55,069.06 | 2.94 | 16.41 | 16.71 | 19.29 | 12.95 | 3.90 | 5.88 |
| Adani Power | 549.70 | 2,12,015.93 | 5.24 | 9.74 | 56.44 | 43.89 | 17.84 | 1.81 | 5.78 |
| Tata Power | 392.95 | 1,25,560.87 | 8.94 | 50.17 | 7.83 | 26.59 | 17.81 | 4.75 | 7.08 |
| JSW Energy | 491.65 | 80,860.48 | 5.59 | 109.33 | 4.50 | 5.26 | 7.44 | 0.92 | 14.09 |
| SJVN | 146.95 | 57,748.34 | 4.04 | 51.66 | 2.84 | 10.12 | 11.05 | 2.69 | 27.77 |
| Torrent Power | 1,164.85 | 55,984.65 | 4.75 | 26.65 | 43.71 | 20.05 | 19.33 | 3.66 |
Profitability
- NHPC’s net profit margin of 41% is higher than competitors like SJVN, NLC India, and Tata Power indicating higher profitability.
- However, NHPC’s return on equity of 11% is lower than SJVN’s 13% and Tata Power’s 18% showing scope for improvement.
Liquidity
- NHPC has a current ratio of 0.98x which is lower than SJVN’s 3.3x but higher than Tata Power’s 0.8x.
- This indicates NHPC’s liquidity position is adequate relative to peers.
Leverage
- NHPC has maintained a debt/equity ratio of 0.8x over the years which is lower than most peers showcasing its conservative leverage.
Efficiency
- NHPC’s receivables turnover ratio stands at 10.5x which is better than SJVN’s 5.8x indicating more efficient working capital management.
Valuations
- NHPC is trading at a P/E ratio of 25x which is higher than SJVN’s 14x and NLC India’s 22x indicating relatively higher valuations.
Future Outlook for NHPC Limited Share
Expert Opinions and Market Sentiments
Analyst Opinions:
- The company is rated “BUY” by 3 analysts and “HOLD” by 2 analysts
- The average analyst rating is “hold” with a target price of ₹105.83.
- Some analysts are bullish on the stock, with a target price as high as ₹156.32.
- Others are more cautious, with a target price as low as ₹95
- Analysts are generally bullish on NHPC, with an average price target of ₹156.32 for the end of 2024.
- However, some analysts have expressed concerns about the company’s slow growth rate.
Market Sentiments
- The stock is currently down 2.32%.
- The stock is down 12.35% year-to-date.
- The stock has a P/E ratio of 24.58, which is higher than the industry average of 15.58.
- The stock has a P/B ratio of 2.71, which is higher than the industry average of 1.54.
- The stock has a dividend yield of 1.84%, which is lower than the industry average of 2.35%.
Risk Assessment of NHPC Limited Share
Comprehensive Risk Analysis
Key risks associated with NHPC shares include:
Operational Risks
- Hydrology risks – Changes in river water levels due to irregular monsoons or climate change altering power generation.
- Cost overruns – Delays and design changes resulting in higher costs for new projects.
- Execution risks – Challenges in implementing large-scale, long-duration hydroelectric projects.
Regulatory Risks
- Policy changes – Sudden tariff structure revisions may impact revenues.
- Renewable energy reforms – Any regulatory shifts as renewable energy share increases in India.
Market Risks
- Power demand fluctuations – Macroeconomic cycles influencing energy demand and consumption.
- Competition – Emergence of new private players in the hydroelectricity domain.
- Fuel supply uncertainty – Disruptions in domestic gas or coal supply impacting overall power sector.
Mitigation Strategies
NHPC can mitigate associated risks by:
- Strengthening project management and collaborations for timely execution.
- Expanding presence across complementary renewables to diversify revenue streams.
- Proactively enhancing ESG standards to align with global best practices.
- Maintaining healthy balance sheet and liquidity to absorb external shocks.
- Leveraging technology to improve hydro plant efficiency and competitiveness.
Conclusion
- NHPC Limited is poised for strong long-term growth based on India’s hydroelectricity and renewable energy potential.
- NHPC’s financial performance has been stable, underpinned by strong project execution and balance sheet.
- Share price is expected to increase steadily as NHPC expands capacity and navigates sectoral challenges.
- Government promoter holding lends stability and funding access despite constraining private participation.
- NHPC must manage risks related to execution delays, regulations, climate change through mitigation strategies.
NHPC’s share price trends must be continuously tracked by investors to identify value-accretive investing opportunities. Monitoring of financial metrics, industry dynamics, competitive landscape, regulations, and risk factors is essential for informed investment decisions.
creditbite source
Financial Reports:
- NHPC Limited Annual Reports:
- Ministry of Power, Government of India:
Analyst Reports:
- Edelweiss Research:
- Motilal Oswal Financial Services: https://www.motilaloswal.com/
- ICICI direct
News Articles:
- The Economic Times: https://economictimes.indiatimes.com/
- Business Standard:
- Reuters: https://www.reuters.com/
Disclaimer: This analysis of Nhpc share price targets is for informational purposes only, not investment advice. I’m not a SEBI-authorized expert. Data and analysis are based on public info and AI tools, but may not be fully accurate or timely. Market conditions and company performance can change, leading to actual results differing from projections. Always do your own research and consult a qualified financial advisor before making any investment decisions