Neutral on NHPC, target price Rs 26: Motilal Oswal

Motilal Oswal has neutral call on NHPC with a target price of Rs 26. The current market price of NHPC Ltd. is Rs 25.35.
NHPC Ltd., incorporated in the year 1975, is a Large Cap company (having a market cap of Rs 25514.39 Crore) operating in Power sector.

Financials
For the quarter ended 31-12-2020, the company reported a Consolidated Total Income of Rs 2610.69 Crore, down -15.40 % from last quarter Total Income of Rs 3086.03 Crore and up 14.53 % from last year same quarter Total Income of Rs 2279.45 Crore. Company reported net profit after tax of Rs 961.58 Crore in latest quarter.


Investment Rationale
The capex run-rate is expected to increase on account of investments in new projects. However, their commissioning remains 4–5 years away – implying FCF/RoEs would be dragged down in the near term.

Promoter/FII Holdings
Promoters held 71 per cent stake in the company as of Dec 30, 2020, while FIIs held 4 per cent, DIIs 14.5 per cent and public and others 10.6 per cent.