NHPC Share Price Target 2024: Anand Rathi BULLISH on PSU stock - BUY?
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Updated May 5, 2024 | 03:21 PM IST NHPC, a Mini Ratna category I public sector utility, is the Government of India's flagship hydroelectric generation company. (Image: istock/ET Now News) NHPC Share Price Target 2024: Brokerage firm Anand Rathi Research Team remains bullish on the state-owned hydropower company NHPC and has called the company's stock their special pick. The brokerage, in their report, pointed out that similar to other PSU stocks, NHPC too had a fantastic run of over 100 percent from the month of October 2023. "Then, after the stock underwent a major consolidation for over three months. Recently, we witnessed a breakout from this consolidation, and the price action resembles a bullish inverse Head & Shoulder pattern," said the brokerage in the report. NHPC, a Mini Ratna category I public sector utility, is the Government of India's flagship hydroelectric generation company. The company's core operations revolve around the production and distribution of substantial power volumes to diverse Power Utilities. In addition to its primary function, NHPC also engages in offering project management, construction contracts, consultancy services, and power trading activities. The company is the largest hydropower producer with a strong financial risk profile and is focused on maintaining an average return on equity of 16.5 per cent going forward. NHPC Share Price target 2024
The brokerage advised traders to accumulate NHPC stock in the range of Rs 99 - Rs 95 with a stop loss of Rs 85 on a closing basis for an upside target of Rs 121.
Here are the key rationales of the Anand Rathi Research Team on the NHPC stock:
The brokerage pointed out that NHPC and Andhra Pradesh Power Generation Corporation (APGENCO) have entered into an MOU for the execution of two designated Pumped Hydro Storage Projects (PSPs) in the initial stage. These projects, namely Kamlapadu-950 MW and Yaganti-1000 MW PSPs, are part of the collaborative endeavor aimed at implementation. Gujarat Urja Vikas Nigam Limited (GUVNL) has issued an LOI to the company for a 200 MW capacity Solar Power Project with an estimated financial implication of Rs 846.66 crore.
In FY 2023, NHPC's power plants collectively achieved an impressive Aggregate Plant Availability Factor (PAF) of 88.7 percent, marking an improvement from the previous year's figure of 87.8 percent. "During this period, 18 out of NHPC's 20 hydroelectric power plants operating independently surpassed the NAPAF target, an increase from the previous fiscal year where 16 out of 20 plants achieved this milestone. Furthermore, 11 plants exceeded their designated energy generation capacities, as opposed to 10 plants in the preceding year," highlighted the brokerage.
Anand Rathi Research further highlighted that the company has incurred capex of Rs 40,950 million during H1 FY24 against a target CAPEX of Rs 1,08,570 million for FY'24 on a consolidated basis. During H1 FY'24, their power stations have achieved generation of 16,797 million units as against 18,303 million units generated in the corresponding period of the previous year. "The overall financial risk profile of NHPC continued to remain comfortable despite large capex and dividend payout. The company has started work on Jalaun Ultra renewable energy power park in UP, which is expected to generate 2,400 MUS/Yr," said the brokerage.
In Maharashtra, an MoU has been signed for the development of pump storage schemes and other renewable energy source projects in the state of Maharashtra. "The MoU outlines plans for the establishment of four pumped storage projects with a combined capacity of 7,350 megawatts. Additionally, improved operational performance is expected for the Parbati-III plant, projected to commence from the fiscal year 2025 onwards," added the brokerage.
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(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)