NHPC - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.8
| Stock Code | NHPC | Market Cap | 78,723 Cr. | Current Price | 78.4 ₹ | High / Low | 92.3 ₹ |
| Stock P/E | 21.8 | Book Value | 39.6 ₹ | Dividend Yield | 2.44 % | ROCE | 6.40 % |
| ROE | 9.43 % | Face Value | 10.0 ₹ | DMA 50 | 79.1 ₹ | DMA 200 | 80.0 ₹ |
| Chg in FII Hold | -0.05 % | Chg in DII Hold | 0.47 % | PAT Qtr | 1,328 Cr. | PAT Prev Qtr | 293 Cr. |
| RSI | 45.6 | MACD | -0.37 | Volume | 1,06,17,151 | Avg Vol 1Wk | 1,57,65,052 |
| Low price | 68.7 ₹ | High price | 92.3 ₹ | PEG Ratio | -12.6 | Debt to equity | 0.99 |
| 52w Index | 41.0 % | Qtr Profit Var | 48.5 % | EPS | 3.60 ₹ | Industry PE | 28.7 |
📊 Financials: The company shows modest profitability with ROE at 9.43% and ROCE at 6.40%, reflecting limited efficiency in capital usage. Debt-to-equity is 0.99, indicating a leveraged balance sheet. Quarterly PAT rose sharply from ₹293 Cr. to ₹1,328 Cr., a 48.5% variation, highlighting strong earnings momentum. EPS of ₹3.60 is modest relative to market capitalization, suggesting limited cash flow strength.
💹 Valuation: Current P/E of 21.8 is below the industry average of 28.7, suggesting fair valuation. The PEG ratio of -12.6 indicates weak growth prospects relative to price. Book value of ₹39.6 against a market price of ₹78.4 implies a reasonable P/B ratio. Intrinsic value appears close to current levels, offering limited upside potential.
🏭 Business Model: The company operates in power generation, primarily hydroelectric projects, benefiting from government backing and renewable energy demand. Competitive advantage lies in its established infrastructure, long-term contracts, and alignment with clean energy initiatives, though profitability remains modest compared to peers.
📈 Entry Zone: A favorable entry would be closer to ₹70–75, near the recent low of ₹68.7. Current price of ₹78.4 is slightly above fair value, so accumulation on dips is recommended.
⏳ Long-Term Holding: Stable operations, government support, and dividend yield make it suitable for long-term holding. However, modest return ratios and high leverage suggest cautious accumulation rather than aggressive buying.
Positive
- ✅ Dividend yield of 2.44% adds shareholder value
- ✅ PAT growth from ₹293 Cr. to ₹1,328 Cr. shows strong earnings momentum
- ✅ Reasonable P/E (21.8) compared to industry average
- ✅ Increase in DII holding (+0.47%) shows domestic institutional support
Limitation
- ⚠️ Modest ROE (9.43%) and ROCE (6.40%)
- ⚠️ High debt-to-equity ratio (0.99)
- ⚠️ Negative PEG ratio (-12.6) indicates weak growth prospects
Company Negative News
- 📉 Decline in FII holding (-0.05%) shows reduced foreign investor confidence
Company Positive News
- 📈 Strong quarterly PAT growth supports earnings outlook
- 📈 Dividend yield of 2.44% provides shareholder returns
Industry
- ⚡ Power generation sector benefits from renewable energy demand
- 📊 Industry P/E at 28.7 suggests peers are valued higher
- 🌍 Growth opportunities in hydro and green energy projects
Conclusion
Overall, the company is financially stable with government backing and strong earnings growth. However, modest return ratios and high leverage limit upside potential. Best strategy is cautious accumulation near ₹70–75 for long-term holding, while avoiding aggressive buying at current levels.
Would you like me to extend this with a peer comparison against other power generation companies, or a technical analysis view to highlight support/resistance and momentum indicators?