Buy NHPC: target of Rs 45: ICICI Securities

ICICI Securities research report on NHPC

We visited NHPC’s Subansiri Lower hydroelectric project, India’s largest hydro plant under construction with a generation capacity of 2,000MW situated at the Arunachal Pradesh - Assam border in the North-East. With both the states completely on board and strict monitoring with monthly visits by board level officials of NHPC and senior power ministry officials, the project is progressing at a rapid pace. Overall progress of work up to 7 th Apr’22 is 82%. Post our visit, we believe, while the first two units may be commissioned by Q4FY23E, the remaining units will go on-stream over FY24E. We have revised our estimates accordingly. FY25 will be the first full year of operations, although the plant will partly operate (50-60%) in FY24 too. Another positive outcome of the progress at Subansiri is that GoI is now working to fast-track other large hydro projects including Dibang (2,880MW), and revive Upper Subansiri (2,000MW) and Middle Subansiri (1,800MW).

Outlook

NHPC aims to become a 50GW company in the next 15 years, with 6GW HEPs under construction, and in-pipeline capacities of 26GW HEPs, 8GW PSPs and >12GW RE. Maintain BUY.

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