CLSA has reiterated its high-conviction outperform rating on NHPC with a target price of ₹117, highlighting the company’s strong growth potential as new projects come onstream and hydropower output improves. In the first quarter of FY26, NHPC benefited from improved water availability and the start of new projects, which drove earnings growth. The brokerage sees these as early signs of a more sustained acceleration in profitability.
Over the FY25–28 period, CLSA forecasts recurring earnings excluding minority interest to grow at a compound annual rate of 114%, a dramatic shift compared with the modest 2% growth seen over the past five years. This step-change in earnings is expected to translate into a 69% increase in earnings per share and a 419-basis-point expansion in return on equity between FY25 and FY27.
CLSA believes NHPC is well positioned to capitalise on India’s growing demand for clean energy, with its pipeline of projects set to drive both volume growth and profitability. The brokerage expects that the combination of higher capacity utilisation, favourable hydrological conditions, and disciplined execution will underpin a multi-year growth cycle for the company.
Disclaimer: The views and recommendations made in this article are those of CLSA. This article does not constitute investment advice. Investors should consult their financial advisors before making any investment decisions.
