Hold NHPC; target of Rs 32: ICICI Direct

ICICI Direct's research report onNHPC

During the quarter, gross generation of NHPC was up 11.7% YoY at 336 crore units vs. our estimate of 333 crore units. However tariffs came in at Rs 4.52/Kwhr on account of pending tariff approval of some projects. During FY17, the company added 80 MW of capacity from the TLDP IV project (Unit 3, 4) and 50 MW of a wind project.

Outlook

Also, clarity on commencement on works on Subansiri Lower is yet to come, which has led to significant cost overruns. Though the company is a generous dividend payer, at the same time multiple re-rating has limited scope owing to untimely commissioning of capacity. We maintain HOLD rating on the stock with a fair value of Rs 32/share.

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