CLSA upgrades NHPC to 'high conviction outperform'; shares jump 4%

NHPC shares have tanked around 19 percent on the bourses over the past 12 months.

State-owned hydropower firm NHPC shares jumped four percent in the early session on February 20, after CLSA upgraded the stock to a high-conviction 'outperform' rating from 'outperform' suggesting positive levers for growth.

The brokerage, however, mildly trimmed its target price to Rs 117 per share, down from Rs 120 each, indicating a whopping 57 percent upside.

At 10.45 am, shares of NHPC were quoting Rs 76.8, up 2.9 percent on the NSE.

Follow our market blog to catch all the live updates

The 25 percent correction in NHPC shares over the past six months gives investors an inexpensive opportunity to accumulate. According to the Hong Kong-based brokerage, NHPC's stock price could double in the next four years.

Further, the levels of growth can come from the start of the Parbati 2 hydro project, boosting regulated equity 27 percent in Q1FY25 along with the firm's entry into shorter-duration regulated pump storage.

NHPC will commission hydro projects with a total capacity of 2,170 megawatt (MW) by the end of FY26., the public sector undertaking’s (PSU) chairman and managing director Raj Kumar Chaudhary told Moneycontrol in an exclusive interview.

Besides, the much delayed 2,000 MW Subansiri hydropower project in Arunachal Pradesh will also be commissioned in FY26, he said.

NHPC currently has a total operational capacity of 7,233 MW, of which 6,571 MW is hydropower and the remaining 662 MW is renewable energy. Another 9,314 MW of hydro projects are under construction. At least, 4,000 MW of hydropower projects are at various stages of clearance, and about 5,500 MW at the survey stage. Besides, new initiatives comprise as much as 14,700 MW.

Over the past 12 months, NHPC shares have tanked around 19 percent on the bourses. During the same time, the Nifty 50 index has gained around 3.1 percent.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.