NHPC is a buy: Aunali Rupani, ARM Research Pvt Ltd

Aunali Rupani, Director, ARM Research Pvt Ltd, in a chat with ET Now talks about NHPC.

You have a buy call on NHPC. The company has a lot of expansion plans. Can you just tell us a few?

The IPO of NHPC had been almost a year ago at Rs 36 and it has been at below the issue price. If you see the raw material i.e. water, the monsoon has been really very good, it is almost 102%. That is the main raw material for all hydropower companies.

If the rivers are flowing, it means their capacity utilisation is going to be very good. That means the numbers are going to be very good for the coming quarters. Now if we look at the fundamentals, they have almost 12400 crores as reserves on a market cap of 39000 crores. They have almost 5300 megawatt capacity right now and in the next 2 years, they will have almost 9500 megawatt as their capacity and the thumb rule is for 1 megawatt you need 6 crores. So that means 57000 crores would be the possible market cap of the company in next 2 years that reveals to almost Rs 53 per share. So our short term target in the particular counter is close to Rs 40 and a 2-year target of Rs 53.