The Indian Government, on 27th of February, 2023, approved NHPC’s Hydropower project, the largest ever for the country, with an estimated investment of around 32,000 crores. The project is estimated to take around nine years to build. The 2,880 MW ‘Dibang’ project will be carrying out all its building processes in Arunachal Pradesh, bordered by China.
On the news, the stock opened today at Rs 39.65 and is currently trading at Rs 40 which is approximately a 1 percent gain.
India seeks to shift towards the generation of renewable resources in order to meet rising power demand. Hydropower, having been classified as renewable energy, is a key segment in its transition away from the other conventional resources such as coal to help manage the fluctuations caused by intermittent solar and wind supplies.
Along with the positive outlook it puts to the table, there are some negative aspects that need our attention such as the large-scale environmental damage and dislocation of communities to construct dams has hampered those plans, with local protests delaying projects and basically contributing to the construction costs going up.
NHPC Limited, is the largest hydropower development organization in India, with the capability to undertake all the activities from conceptualization to commissioning of hydro projects. The company has also diversified in the field of Solar & Wind energy development etc.
The company is mandated to plan, promote and organize an integrated and efficient development of power in all its aspects through Conventional and Non-Conventional Sources in India and abroad.
Talking about its financials, the revenues and net profits of the company have been experiencing a sharp downfall in QoQ. Revenues showcased a downfall from 3,366 crores in Q2 to 2,582 crores in Q3. Net profits too have fallen down from 1,683 crores in Q2 to 773 crores in Q3.
ICICI Securities has given a ‘Buy’ recommendation for the stock with a target price of Rs 51 which is an upside of around 28 percent.
Written by Amit Madnani
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