CLSA Predicts 43% Jump in NHPC Stock on Three Growth Catalysts

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AuthorIshaan Verma|Published at:
CLSA Predicts 43% Jump in NHPC Stock on Three Growth Catalysts
Overview

Brokerage firm CLSA has issued a 'High conviction outperform' rating for state-run NHPC Ltd., setting a price target of ₹117 per share, implying a 43% upside. CLSA anticipates 2026 to be a transformative year, forecasting a 64% capacity expansion and a 90% EPS growth by FY27, driven by key project finalizations and awards.

CLSA Bullish on NHPC, Eyes 43% Stock Upside

Brokerage firm CLSA has initiated coverage on state-run NHPC Ltd. with a 'High conviction outperform' rating and a robust price target of ₹117 per share. This valuation suggests a significant potential upside of approximately 43% from the stock's last closing price on Thursday.

CLSA analysts, in a note dated Friday, January 9, identified 2026 as a potential turning point for NHPC. The firm projects a substantial 64% year-on-year expansion in the company's installed capacity. Concurrently, earnings per share are expected to surge by 90% between FY25 and FY27, further bolstering NHPC's long-term expansion narrative.

Key Growth Catalysts Identified

The brokerage firm highlighted three primary catalysts expected to drive NHPC's valuation. The first involves the finalization of tariffs for the crucial Parbati II project, which represents a significant portion of NHPC's regulated equity base at about 25%. This tariff clarity is vital for financial planning and investor confidence.

The second catalyst is the anticipated full commissioning of the Subansiri Lower Hydro Electric Project by the fourth quarter of 2026. As NHPC's second-largest project, its operationalization will directly contribute to revenue streams and operational capacity.

Lastly, CLSA pointed to the potential award of four new hydro power projects and one pumped storage project in 2026. Securing these new ventures is seen as crucial for enhancing NHPC's earnings visibility and growth prospects extending to FY35, solidifying its position in the renewable energy infrastructure space.

Market Reception and Stock Performance

NHPC currently garners attention from eight analysts, with a mixed but leaning positive sentiment. Four analysts recommend a 'Buy', one suggests 'Hold', while three advise 'Sell'. CLSA's price target of ₹117 is the highest among analysts surveyed, contrasting with ICICI Securities' lower target of ₹72.

Shares of NHPC closed Thursday's trading session down 1.98% at ₹82. The stock has experienced a slight pullback, trading 11% below its 52-week high of ₹92.34, presenting a potential entry point for investors considering CLSA's optimistic outlook.

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