Buy NHPC, target price Rs 45: ICICI Securities

ICICI Securities has buy call on NHPC with a target price of Rs 45. The current market price of NHPC Ltd. is Rs 33.
Time period given by analyst is one year when NHPC Ltd. price can reach defined target.

NHPC Ltd., incorporated in the year 1975, is a Large Cap company (having a market cap of Rs 31692.08 Crore) operating in Power sector.


NHPC Ltd. key Products/Revenue Segments include Power, Income from Finance Leases, Other Operating Revenue, Income from Project Development and Contract Revenue for the year ending 31-Mar-2021.


Financials
For the quarter ended 31-12-2021, the company reported a Consolidated Total Income of Rs 2373.72 Crore, down -25.01 % from last quarter Total Income of Rs 3165.59 Crore and down -9.08 % from last year same quarter Total Income of Rs 2610.69 Crore. Company reported net profit after tax of Rs 887.39 Crore in latest quarter.

Investment Rationale
Over the years, the company has built a strong product portfolio and improved the product The brokerage maintains BUY rating and target price of Rs45/share. NHPC is trading at 6.9x P/E and 0.8x P/B on FY24E basis. Its dividend yield is 5.5%. It believes the company will be able to maintain its dividend payouts as per the DIPAM guidelines, despite the planned capex (as free cashflow is expected to significantly increase once the 2,800MW capacity currently under construction becomes operational by FY24E).

Promoter/FII Holdings
Promoters held 70.95 per cent stake in the company as of 31-Dec-2021, while FIIs owned 5.59 per cent, DIIs 15.51 per cent.