Buy or Sell NHPC stock? CLSA’s ‘high-conviction outperform’ call hinges on FY26 capacity jump, earnings

NHPC

• CLSA gives NHPC a 'high-conviction outperform' call with Rs 117 target price
• NHPC's capacity may rise 64 percent in FY26, boosting earnings visibility
• NHPC board approves Rs 2,000 crore bond issue to aid financial flexibility

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Shares of NHPC Ltd are likely to remain on investors’ radar after CLSA issued a ‘high-conviction outperform’ call on the stock, citing a sharp step-up in capacity and a decisive improvement in earnings visibility from FY26. The brokerage has set a target price of Rs 117 per share, implying an upside of over 42 percent from Thursday’s closing level of Rs 82.

NHPC stock call: CLSA says capacity expansion to aid jump in profit

At the heart of CLSA’s bullish view is its expectation that FY26 will mark an inflection point for NHPC’s scale and growth trajectory.

The brokerage believes the company’s installed capacity could rise by as much as 64 percent year-on-year in FY26, setting the stage for a stronger earnings profile over the medium term. CLSA expects this expansion phase to translate into a sharp improvement in profitability. The brokerage projects nearly 90 percent growth in earnings per share over FY25-27.

The brokerage added that FY26 should solidify NHPC’s decadal growth story as long-pending projects begin contributing meaningfully.

Recent corporate actions have also added to investor interest in the stock. NHPC’s board has approved fund-raising of up to Rs 2,000 crore through the issuance of non-convertible, non-cumulative AH-Series bonds in one or more tranches via private placement, as part of its FY26 borrowing plan. The move is seen as strengthening the company’s financial flexibility ahead of a heavy execution phase and has been one of the triggers behind recent activity in the stock.

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A key operational catalyst highlighted by CLSA is the full commissioning of the Subansiri Lower Hydro Project -- NHPC’s second-largest project -- by the fourth quarter of FY26. Beyond this, the brokerage expects the award of four hydropower projects and one pumped storage project during 2026, which could further strengthen visibility on long-term growth.

NHPC’s recent stock performance has been relatively muted -- up about 5 percent over the past year compared with a roughly 10 percent rise in the Nifty 50. However, CLSA sees NHPC as a scale-up and execution-led opportunity.

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