Mini Ratna stock involved in generation and sale of bulk power to various Power Utilities is drawing investor attention with its ambitious capex plans, projecting an investment of Rs.13,000-14,000 crore in the coming years.
Price Variation
On Monday, shares of NHPC Ltd reached an intra-day high of Rs.78.95 apiece, falling slightly from its previous close of Rs.79.89 each. The stock later retreated to Rs.77.87 per share. Over the past five years, the share delivered over 280 percent.
Capacity Enhancement
NHPC Ltd has outlined a robust capital expenditure (capex) plan, with Rs.11,672 crore earmarked for FY25, of which Rs.8,300 crore has already been spent. Looking ahead, total capex for the coming years is estimated to range between Rs.13,000 crore and Rs.14,000 crore. In addition, the government is offering strong incentives for the hydro power sector, which is expected to support future growth.
Generation from the Parbati 3 project is set to rise following the commissioning of Parbati 2 in March 2025, while the Subansiri Lower Project is on track for timely commissioning. The company has also signed 40-year power purchase agreements (PPAs) for all upcoming projects in accordance with the Central Electricity Regulatory Commission (CERC) guidelines.
Renewable energy initiatives are a key focus, with a total of 261 MW of renewable projects, some of which are currently under construction. These efforts are in line with the company’s strategy to expand its clean energy portfolio and strengthen its position in the sector.
Joint Ventures and Projects
NHPC has partnered with the Andhra Pradesh government to develop pumped storage projects (PSPs) through a joint venture called ANGEL (APGENCO NHPC Green Energy Company). This collaboration includes two PSPs with a combined capacity of 2 GW, such as the 1 GW Yaganti project and the 800 MW Rajupalem project. The total capacity of these projects could potentially reach 6 to 8 GW.
In Gujarat, NHPC has signed a Memorandum of Understanding (MoU) with Gujarat Power Corporation Limited (GPCL) to invest approximately Rs. 4,000 crore in the 750 MW Kuppa Pumped Hydro Storage Project in Chhota Udaipur, with investments expected to begin in 2024/25.
NHPC has also entered into an MoU with the Maharashtra government to establish several pumped storage projects, including Kalu, Savitri, Kengadi, and Jalond.
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Financial Performance
Turning towards the financials of the company, NHPC Ltd reported Q3 FY25 revenue of Rs.2,287 crore, rising 11 percent from Rs.2,056 crore in the same quarter last year. However, Profit After Tax (PAT) decreased by 47 percent to Rs.330 crore, from Rs.623 crore in the same period.
Ratio Analysis
The Return on Capital Employed (ROCE) of the company stands at 7.34 percent, while the Return on Equity (ROE) is 7.39 percent.
The company’s Price-to-Earnings (P/E) ratio is 29.57, lower than its industry average of 45.46. Additionally, the company has a good current ratio of 1.55, debt-to-equity ratio of 0.85 and an Earnings Per Share (EPS) of Rs.2.7.
Company Profile
NHPC, a Mini Ratna Category I public sector enterprise, is the Government of India’s leading hydroelectric power generation company. It specializes in generating and selling bulk electricity to various power utilities. In addition, the company offers project management, construction contracts, consultancy services, and engages in power trading.
Written by – Siddesh S Raskar
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