NHPC Ltd., incorporated in the year 1975, is a Large Cap company (having a market cap of Rs 28025.65 Crore) operating in Power sector.
NHPC Ltd. key Products/Revenue Segments include Power, Other Services, Income from Finance Leases, Other Operating Revenue and Income from Project Development for the year ending 31-Mar-2020.
Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 2586.91 Crore, up 23.52 % from last quarter Total Income of Rs 2094.30 Crore and down -11.23 % from last year same quarter Total Income of Rs 2914.02 Crore. Company reported net profit after tax of Rs 984.56 Crore in latest quarter.
Investment Rationale
While there has not been much capacity addition in the past few years, we expect 800MW/2,000MW addition in the next 2/4 years. In the medium term, the brokerage sees an improvement in earnings growth and ROE on the basis of these capacity additions. It believes that the improvement in RoE trajectory will lead to an expansion in the valuation multiple as well. It initiates coverage on NHPC with a Buy rating and a SoTP-based TP (Sept’22E) of Rs34, implying 0.9x Sept’23E Book. The 6% dividend yield is a long-term benefit. Key risks include large GOI stake divestment and delayed project execution.
Promoter/FII Holdings
Promoters held 71 per cent stake in the company as of June 30, 2021, while FIIs held 4.3 per cent, DIIs 15.2 per cent and public and others 9.6 per cent.
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