NHPC stands for National Hydroelectric Power Corporation. It is a major Indian public sector company established in 1975. They launched their IPO in Aug 2009. The issue price of the stock was INR 42. The current price of the NHPC stock is INR 99.75 as of Date 25 June 2024 at time 1:52 PM (IST)
Primary mission of NHPC is to develop and operate large-scale hydroelectric plants, a crucial task given India’s growing energy demands. These massive projects harness the power of flowing water to generate clean electricity. The electricity produced not only benefits the environment; it goes directly into the national grid, providing a reliable and stable base to power millions of homes and businesses across the country.
NHPC’s focus on hydropower goes beyond immediate needs. By promoting this renewable energy source, they are helping India reduce its dependence on fossil fuels, combating climate change, and paving the way for a cleaner future. In short, NHPC serves as the engine room for India’s clean energy ambitions, ensuring a sustainable and secure power supply for the country’s ever-growing population.
Based on the image you sent, which appears to be a screenshot of a financial website showing NHPC Ltd. stock data, here’s a breakdown of the listed ratios and their potential impact on the future stock price:
Price Prediction Table of NHPC (2025)
Price Prediction for next 12 Months
| Months | Target Price |
|---|---|
| – | ₹99.00 |
| June 2024 | ₹0.39 |
| July 2024 | ₹99.78 |
| August 2024 | ₹100.17 |
| September 2024 | ₹100.56 |
| October 2024 | ₹100.95 |
| November 2024 | ₹101.34 |
| December 2024 | ₹101.74 |
| January 2025 | ₹102.14 |
| Feburary 2025 | ₹102.54 |
| March 2025 | ₹102.94 |
| April 2025 | ₹103.34 |
| May 2025 | ₹103.74 |
Price Prediction Table of NHPC (2025-2030)
Price prediction of NHPC stock for the next 6 Years
| Year | Target Price |
|---|---|
| 2024 | ₹99.00 |
| 2025 | ₹103.74 |
| 2026 | ₹108.72 |
| 2027 | ₹113.93 |
| 2028 | ₹119.39 |
| 2029 | ₹125.11 |
| 2030 | ₹131.10 |
Ratios
- Market Cap – ₹ 1,00,350 Cr.
- P/E Ratio – 27.8
- Book Value – ₹ 38.5
- Dividend Yield – 1.84 %
- ROCE (Return on Capital Employed) – 7.37 %
- ROE (Return on Equity) – 9.59 %
- EPS (Earnings Per Share) – ₹ 3.61
- Industry PE (for comparison with similar companies) – 37.8
- Price to Book Value – 2.64
- Industry PBV (for comparison with similar companies) – 2.59
- Debt to Equity Ratio – 0.84
- Profit Variation (3 Years) – 2.03 %
- Sales Growth (3 Years) – (-0.05)%
- Price to Cash Flow – 14.5
- Return on Assets – 4.49 %
- Altman Z Score (a measure of bankruptcy risk) – 2.65
NHPC Financial Snapshot – A Deeper Look (based on provided data)
Market Size and Valuation:
- Market Cap: ₹ 1,00,350 Cr indicates NHPC is a large company in terms of market capitalization.
Profitability:
- P/E Ratio of 27.8: This could suggest the stock price is relatively high compared to its earnings. Investors might be paying a premium for NHPC’s future growth potential or stability. However, it’s important to compare this P/E ratio with the Industry PE (37.8) to see if it’s truly high.
- ROE of 9.59%: This is a moderate return on equity, indicating NHPC is generating a decent profit on its shareholders’ investment.
- EPS of ₹ 3.61: This represents the company’s profit attributable to each outstanding share.
Financial Health:
- Debt to Equity Ratio of 0.84: This is a healthy ratio, suggesting NHPC has a good balance between debt financing and equity financing. This indicates a lower risk of financial distress.
- Return on Assets (ROA) of 4.49%: This is a low efficiency ratio. It means NHPC isn’t generating a high amount of profit from its total assets. There might be room for improvement in asset utilization.
- Altman Z Score of 2.65: This score falls in the “safe zone” and suggests a low likelihood of NHPC going bankrupt in the near future.
Growth:
- Profit Variation (3 Years) of 2.03%: This indicates slow profit growth for NHPC over the past three years. Investors looking for high-growth companies might be less interested.
- Sales Growth (3 Years) of -0.05%: This suggests stagnant sales revenue for NHPC. This could be a concern for investors looking for companies with expanding revenue streams.
Valuation Comparison:
- Price to Book Value (P/B) Ratio of 2.64: This means the market price per share is higher than the book value per share. Investors are willing to pay a premium for NHPC compared to its net asset value.
- Industry PE of 37.8 and Industry PBV of 2.59: If NHPC’s P/E is lower than the industry average (37.8), it might be considered undervalued by some investors. Similarly, if the P/B ratio is slightly higher than the industry average (2.59), it could suggest a slight overvaluation.
NHPC’s Future: A Glimpse of the Future
NHPC, India’s leading hydropower company, faces both opportunities and challenges in the coming years. Here is a look at what the future may hold:
Growth and Expansion:
Ambitious expansion plans: NHPC aims to double its current capacity to 16,285 MW by 2032. This includes ongoing and upcoming hydropower projects, as well as moving cautiously into solar power.
Focus on Hydropower: Hydropower remains NHPC’s core strength, and they may continue to pursue new hydropower projects in India and potentially abroad through collaborations.
Cautious approach to renewable energy: While exploring solar power, NHPC prefers projects with a minimum return on equity of 12% to ensure financial viability. Wind power may also be considered in the future.
Market and Financial Scenario:
Renewable energy push by Government: The strong push for renewable energy by the Government of India may create competition for NHPC from solar and wind power companies. NHPC will need to adapt and find possible ways to integrate renewable energy into its portfolio.
Role of Hydropower in Grid Stability: Hydropower plays a key role in grid stability by providing peaking power and balancing intermittent renewable sources such as solar and wind. This can strengthen NHPC’s position in the future energy mix.
Financial Performance: Analysts’ forecasts suggest that NHPC’s earnings and revenues will grow at a healthy rate. However, maintaining a strong financial performance will depend on effectively managing debt, optimising asset utilisation, and navigating the changing market landscape.
Technological Advancements:
Modernisation and Efficiency: NHPC may invest in modernisation of existing hydropower plants to improve efficiency and extend their lifespan.
Pumped storage technology: This technology can be used to store excess renewable energy and release it during peak demand periods, potentially creating new opportunities for the company.
Smart grid integration: Integration with the smart grid can allow it to optimize hydropower dispatch and participate in ancillary service markets.
Environmental considerations:
Balancing growth and sustainability: The company may face increasing scrutiny regarding the environmental impact of new hydropower projects. Sustainable development practices will be critical to gaining social acceptance and regulatory approvals.
Climate change impacts: Climate change may impact river flow and hydropower generation. It may need to optimize its operations and consider options such as run-of-the-river projects that minimize impact on water flow.
Overall, the future of the company depends on its ability to adapt to the changing energy landscape, adopt new technologies, and address environmental challenges. By leveraging its expertise in hydropower and focusing on strategic growth, it can remain a key player in India’s energy sector.
Conclusion
The future of the stock presents both exciting opportunities and significant challenges. Their ambitious expansion plans, focus on grid stability with hydropower, and potential integration of renewables such as solar have them well-positioned for the growing energy market. However, competition from renewable energy sources, navigating the changing regulatory landscape, and adapting to climate change are factors that must be considered.
By adopting technological advancements, prioritizing sustainable development practices, and maintaining financial discipline, the company can strengthen its position as a leader in India’s energy sector.
Disclaimer
All the information shared in the blog is for knowledge purposes only and reflects my study on the stock market. I study about the stock market and try to predict the future value of the market/stocks and post analysis to keep track of all the studies I do.
None of the information is investment advice to anyone. Please do your due diligence or contact your financial advisor before making any decisions.
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