Buy NHPC, target price Rs 46: ICICI Securities

ICICI Securities has buy call on NHPC with a target price of Rs 46. The current market price of NHPC Ltd. is Rs 36.05.
Time period given by analyst is one year when NHPC Ltd. price can reach defined target.

NHPC Ltd., incorporated in the year 1975, is a Large Cap company (having a market cap of Rs 36262.58 Crore) operating in Power sector.

NHPC Ltd. key Products/Revenue Segments include Power, Income from Finance Leases, Other Operating Revenue, Income from Project Development and Contract Revenue for the year ending 31-Mar-2021.


Financials
For the quarter ended 30-06-2022, the company reported a Consolidated Total Income of Rs 2990.86 Crore, up 47.58 % from last quarter Total Income of Rs 2026.62 Crore and up 15.62 % from last year same quarter Total Income of Rs 2586.91 Crore. Company reported net profit after tax of Rs 1052.86 Crore in latest quarter.

Investment Rationale
Significant progress has been made by NHPC’s Subansiri Lower Hydroelectric Project, despite challenges. Till date, 84% of the estimated capex has been incurred (Rs161.8bn). While the first two units are expected to be commissioned by Mar’23, the remaining six units will go on-stream over FY24E. The associated transmission systems are also likely to be commissioned by Mar’23. Thus, FY25 will be the first full year of operations, while FY24 will have part operations (50-60%). For Parbati-II, the brokerage expects the balance two units to be commissioned by Q3FY24 as geological constraints are delaying the completion of head race tunnel excavation. NHPC has signed several MoUs/agreements for developing RE projects as well as for new hydro projects, and has made substantial progress in several other under-construction HEPs. NHPC aims to become a 50GW company over the next 15 years, with 6GW HEPs under construction, and in-pipeline capacities of 26GW HEPs, 8GW PSPs and >12GW RE.