CLSA has initiated coverage on NHPC Ltd. with a ‘High Conviction Outperform’ rating, setting a target price of ₹117, which implies a potential upside of 43% from the current market price of ₹81.82.
The brokerage highlighted the strategic significance of Parbati-II hydroelectric project (P2 HEP), which despite being NHPC’s most technically complex undertaking, is now approaching operationalization. Originally planned for completion in seven years, the project faced significant geological surprises and challenges, extending its timeline to nearly 25 years.
Once commissioned, P2 HEP is expected to boost NHPC’s total capacity by 11.5%, but more notably, it will enhance the company’s regulated equity by a substantial 26%, improving its earnings profile under India’s regulated return framework.
CLSA believes NHPC’s long execution track record, attractive valuations, and strong project pipeline position it as a compelling opportunity in the Indian power sector. The commissioning of P2 HEP is seen as a turning point, unlocking long-awaited value for shareholders.
Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Investors are advised to consult their financial advisors before making any investment decisions.
