Buy NHPC; target of Rs 27: Emkay Global Financial

Emkay Global Financial is bullish on NHPC has recommended buy rating on the stock with a target price of Rs 27 in its research report dated September 01, 2020.

Broker Research

September 02, 2020 / 12:23 IST

26 Aug, 2025 12:21

Volume

Todays L/H

Emkay Global Financial's report on NHPC

Generation fell 5.5% yoy to 8.1bn units as two units of Chamera II power station were shut. Blended realization rose 0.8% yoy to Rs3.23/unit. However, revenue increased 4.0% yoy to Rs25.2bn, driven by incremental revenue from the power trading business. PLF declined to 68% in Q1FY21 from 72% a year ago, due to a fall in generation, however, PAF was flat at 91% yoy. EBITDA fell 5.5% yoy to Rs14.2bn, primarily due to power trading expenses of Rs2.1bn. Adjusted PAT rose 3% yoy to Rs9.1bn, above our estimate. NHPC has guided for the full commissioning of Parbati II project by Q4FY22, which will enhance regulated equity to Rs158.9bn in Q1FY23 (vs. Rs128.9bn in FY20). We expect Subansiri project to achieve CoD in FY25, which would scale regulated equity to Rs220bn.

Outlook

The company has guided for capex of Rs53bn/Rs76bn in FY21/22 (equity contribution - Rs20.7bn/Rs30.5bn). We maintain FY21/22E EPS and SoTP-based TP of Rs27. We retain Buy on attractive valuations, capacity additions and a high dividend yield of 7%.

For all recommendations report, click here