NHPC’s recent surge in share price has captured market attention, hitting a 52-week high at Rs 85 per share on the Bombay Stock Exchange (BSE). This upward movement followed the government’s announcement of a 3.5% stake sale, attracting significant interest from institutional investors who submitted bids totaling over Rs 6,000 crore.
JM Financial, a domestic brokerage firm, expresses bullish sentiments with a revised price target of Rs 85 per share, indicating a substantial 17.9% upside potential. This adjustment reflects the evolving dynamics in NHPC’s landscape, with the brokerage emphasizing the company’s unique position as the only large Central Public Sector Enterprise (CPSE) utility boasting a 100% green energy portfolio.
NHPC stands as a major player in India’s hydropower sector, contributing 15% to the country’s installed hydropower capacity with an aggregate of 7,071MW. The firm’s commitment to a green energy portfolio aligns with the nation’s strategic focus on enhancing hydropower for grid balancing and pumped hydro storage.
The brokerage maintains a ‘BUY’ rating on NHPC, emphasizing the company’s green energy dominance and raises the target price to Rs 85 per share. This target implies 10 times the FY26 blended enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) and 1.6 times the FY26 price-to-book ratio (P/B).
The government’s recent stake sale in NHPC, conducted through a two-day offer for sale (OFS), involved selling over 35 crore equity shares, with an additional greenshoe option for 10 crore more shares, at a floor price of Rs 66 per share. At this floor price, the OFS is anticipated to generate around Rs 2,000 crore for the government. Institutional investors responded enthusiastically, submitting bids for 91.16 crore shares at an indicative price of Rs 68.50 per share, collectively valuing the bids at Rs 6,000 crore.
As of the latest trading session, NHPC’s share price settled at Rs 80.45, marking a 9.50% increase. The stock outperformed the sector by 7.22%, showcasing a gain of 13.22% over the last two days.
NHPC’s stock has been a remarkable performer in recent years, delivering multibagger returns to shareholders. Over the past two years, it provided a substantial 162.05% return, and in the last three years, investors witnessed an impressive 227.03% gain. Such robust performance underscores NHPC’s strategic positioning in the energy sector and its ability to generate substantial returns for investors.
Additionally, NHPC has not only demonstrated capital appreciation but also offered income through dividends.The stock currently boasts a dividend yield of 2.30% over the past 12 months at its present valuation. In 2023, NHPC distributed dividends twice, amounting to a cumulative sum of Rs 1.85.
Investors should note that while this information provides insights into NHPC’s recent performance and market outlook, it is crucial to approach investment decisions with caution. Market dynamics can be influenced by various factors, and individual financial circumstances should be considered before making any investment decisions.
In conclusion, NHPC’s recent surge in share price, government stake sale, and positive brokerage outlook highlight the company’s robust performance and strategic importance in India’s energy landscape. Investors should carefully assess their investment goals and risk tolerance before considering any investment in NHPC or any other financial instrument.
NHPC’s recent stellar performance underscores its resilience in the energy market, with the government’s stake sale signaling confidence among institutional investors. The revised target price from JM Financial reflects a positive outlook, emphasizing NHPC’s green energy focus and unique market position.
The stock’s recent surge to a 52-week high and its consistent outperformance in the sector highlight investor optimism. NHPC’s remarkable multibagger returns over the past years, coupled with its dividend-paying history, make it an attractive proposition for both growth and income-seeking investors.
However, it’s crucial to approach investments with a comprehensive understanding of market dynamics and potential risks. External factors, regulatory changes, and market volatility can impact stock performance. Investors should stay informed and consider professional advice to make well-informed investment decisions in line with their financial goals.