Buy NHPC Ltd for the Target Rs. 103 by JM Financial Services Ltd
NHPC reported consolidated net revenue of INR 32bn (19% YoY, 8% JMFe) driven by higher generation (11% YoY). EBITDA stood at INR 18bn (12% YoY, 5% JMFe). Adj. PAT stood at INR 10.6bn (4% YoY, 9% JMFe). The company expects to commission three units of 8x250 MW Subansiri Lower during Aug-Sep’25. The balance 5 units of Subansiri, 120MW Rangit-IV, and 624MW Kiru are expected to commission during FY26/ FY27. The installed capacity with regulated return is set to grow from INR 142 bn in FY25 to 292 bn by FY28. We maintain BUY on the sole large utility that boasts a 100% green energy portfolio, with a SOTP-based TP of INR 103.
* Operational highlights: Generation during 1QFY26 stood at 8813MU (11% YoY). Generation of standalone NHPC was 8196MU (18% YoY) and NHDC was 617 MU (-37% YoY) during 1QFY26
* Project commissioning: 4x200MW Parbati-II was fully commissioned in Apr’25. The 3x40MW Rangit-IV is expected to commission by 1QFY27. 4x156 MW Kiru and 4x250MW Pakal Dul are expected to commission in 3QFY27. The 4x125MW Teesta-VI is expected to commission in 3QFY28 and 4x135MW Kwar is expected to commission in 4QFY28. Current installed hydro capacity of company stands at 7.8 GW which is expected to reach 9.1GW/ 11.5GW/ 12.6GW/ 13.4GW in FY26/ FY27/ FY28/ FY29 progressively.
* 8x250MW Subansiri Lower: Construction work at the site is progressing at full pace, with overall project completion at 96%. Dry commissioning of Units-1,2&3 has been completed. A team from the National Dam Safety Authority (NDSA) has visited the project site to review the reservoir filling plan. As per advice of NDSA, balance work is under completion. The company expects to commission three units of the project during AugSep’25.
* Regulated Equity: Regulated Equity stood at INR 142bn in FY25 which is expected to reach INR 181bn/ INR 264bn/ INR 292bn by FY26 / FY27/ FY28.
* Renewables: During the quarter, company commissioned 214MW out of 300MW Karnisar Solar Power Project. Renewable capacity of the company as on Jun’26 stood at 476MW. NHPC has 1383MW/ 6400MW of renewable projects under construction as owner/ intermediary. Out of the ownership portfolio it expects to commission entire 783MW in FY26. In addition to these, the company has 1,345MW/ 14,780MW of RE projects under pipeline or tendering as owner/ intermediary.
* Pumped hydro storage: Company has signed MoUs for capacity of c.19GW of PSP with various state govt. and organisations. The construction for 640MW Indrasagar Omkareswar PSP project is expected to begin in FY26.
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SEBI Registration Number is INM000010361
