Buy NHPC of Rs 51: Emkay Global Financial

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Emkay Global Financial's research report on NHPC

NHPC (Standalone) reported PAT of Rs7.8bn – a marginal growth of ~3% YoY, mainly on the back of higher other income owing to dividend from NHDC. For 3Q, generation was down 7% YoY, albeit growing 3% YoY for 9M. PAT over 9MFY23 stood at Rs32.6bn – a growth of 11% YoY. Incentives earned during the quarter stood at Rs1.35bn vs Rs1.47bn YoY. Higher PAT (Rs2bn in 3QFY23 vs Rs1.5bn YoY) at NHDC (51% subsidiary) was the main driver of the increase in ‘other income’. NHDC has reported 9M PAT growth of 51% YoY.

Outlook

We raise FY23E/FY24E EPS by ~6% each, factoring-in the higher earnings from NHDC. We maintain our SoTP-based Dec-23 TP of Rs51/share. Full plant commissioning of Parbati-II and Subansiri is expected by 3QFY24 and 1QFY25, respectively, while unit-wise commissioning for Subansiri is estimated to start in the next two quarters.

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NHPC - 09 -02 - 2023 - emkay