⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
NHPC - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.6
| Stock Code | NHPC | Market Cap | 77,347 Cr. | Current Price | 77.0 ₹ | High / Low | 92.3 ₹ |
| Stock P/E | 24.4 | Book Value | 39.6 ₹ | Dividend Yield | 2.48 % | ROCE | 7.44 % |
| ROE | 8.40 % | Face Value | 10.0 ₹ | DMA 50 | 79.4 ₹ | DMA 200 | 81.9 ₹ |
| Chg in FII Hold | 0.34 % | Chg in DII Hold | -0.23 % | PAT Qtr | 926 Cr. | PAT Prev Qtr | 1,072 Cr. |
| RSI | 43.7 | MACD | -0.59 | Volume | 94,54,766 | Avg Vol 1Wk | 1,82,61,420 |
| Low price | 71.0 ₹ | High price | 92.3 ₹ | PEG Ratio | -6.77 | Debt to equity | 0.99 |
| 52w Index | 28.1 % | Qtr Profit Var | 3.06 % | EPS | 3.15 ₹ | Industry PE | 25.6 |
📊 Core Financials
- Revenue & Profitability: Quarterly PAT declined from 1,072 Cr. to 926 Cr. (-13.6%), showing earnings pressure. EPS at 3.15 ₹ is modest relative to valuation.
- Margins: ROCE at 7.44% and ROE at 8.40% are relatively weak, indicating limited efficiency compared to peers.
- Debt: Debt-to-equity ratio of 0.99 reflects high leverage, which is typical for capital-intensive utilities.
- Cash Flow: Dividend yield of 2.48% provides steady shareholder returns, supported by regulated cash flows.
💹 Valuation Indicators
- P/E Ratio: 24.4 vs Industry PE of 25.6 → Fairly valued, slightly below peers.
- P/B Ratio: Current Price (77 ₹) / Book Value (39.6 ₹) ≈ 1.95 → Reasonable valuation.
- PEG Ratio: -6.77 → Negative, indicating weak growth prospects relative to price.
- Intrinsic Value: Current price is close to fair value, offering limited upside unless earnings improve.
🏭 Business Model & Competitive Advantage
- NHPC operates as India’s largest hydropower utility, benefiting from government backing and regulated tariffs.
- Stable business model with long-term contracts ensures predictable cash flows.
- High debt levels are structural to the sector but supported by government guarantees.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive accumulation range between 70 ₹ – 74 ₹, closer to support levels and below DMA 200.
- Long-Term Holding: Suitable for conservative investors seeking dividend yield and stability. Growth prospects are limited, so staggered buying is recommended.
✅ Positive
- Dividend yield of 2.48% provides steady income.
- Government backing ensures business stability.
- P/E ratio slightly below industry average, suggesting fair valuation.
- FII holding increased by 0.34%, showing foreign investor confidence.
⚠️ Limitation
- ROCE (7.44%) and ROE (8.40%) are weak compared to peers.
- High debt-to-equity ratio (0.99) increases financial risk.
- PEG ratio negative, indicating poor growth prospects.
📉 Company Negative News
- Quarterly PAT declined from 1,072 Cr. to 926 Cr.
- DII holding decreased by 0.23%, showing reduced domestic institutional support.
📈 Company Positive News
- Dividend yield of 2.48% supports shareholder value.
- FII inflows (+0.34%) highlight foreign investor interest.
- Stable regulated business model ensures predictable cash flows.
🌐 Industry
- Power utility sector benefits from government infrastructure push and rising electricity demand.
- Industry PE at 25.6 suggests NHPC trades at a slight discount, but growth prospects remain limited.
🔎 Conclusion
NHPC demonstrates stability with government backing, steady dividends, and fair valuation. However, weak return ratios, high debt, and limited growth prospects cap upside potential. Investors may consider entering around 70–74 ₹ for long-term holding focused on dividend yield and stability rather than aggressive growth.
I can also outline technical support and resistance zones using RSI, MACD, and DMA data to complement this fundamental analysis if you'd like.