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 33.95.
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 35258.07 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
The brokerage maintains BUY rating on the stock with a DCF-based target price of Rs46. On FY24E basis, the stock is trading at 8.3x P/E, 0.9x P/B and 5.7% dividend yield. Key risks: 1) delay in project commissioning, 2) disallowance of project capex leading to lower profit, 3) any adverse regulatory changes by CERC lowering regulated RoE in 2024-29 regulations.

Promoter/FII Holdings
Promoters held 212.85 per cent stake in the company as of 30-Jun-2022, while FIIs owned 19.83 per cent, DIIs 43.68 per cent.