Why Does CLSA See 2026 as a Transformational Year for NHPC’s Growth Story?
About CLSA’s High-Conviction View
CLSA has reiterated its high-conviction Outperform call on NHPC with a target price of ₹117, even as the stock trades around ₹82. The brokerage believes that FY2026 marks a structural inflection point for the company, driven by a sharp step-up in installed capacity, improved earnings visibility, and a pipeline of large hydro and pump storage projects.
According to CLSA, NHPC is entering a phase where years of capital expenditure and project execution begin to translate into sustained earnings growth and long-term scalability.
Unlike incremental upgrades, CLSA’s thesis is built around a transformation in both scale and financial profile. The brokerage expects NHPC’s operating footprint to expand meaningfully, reinforcing its position as India’s largest hydropower producer with improving return visibility.
Key Highlights From CLSA’s Report
🔹 Maintain Outperform rating with a target price of ₹117.
🔹 High-conviction call backed by multi-year growth visibility.
🔹 Installed capacity expected to rise sharply in FY2026.
🔹 Strong earnings expansion projected over FY25–FY27.
🔹 Major hydro and pump storage projects to drive scale.
CLSA estimates that NHPC’s capacity could expand by nearly 64 percent year-on-year in FY2026. Such a jump is unusual for a utility-scale power producer and reflects the culmination of long-gestation hydro projects reaching commissioning stages.
Investors tracking long-duration infrastructure themes often prefer structured approaches such as a Nifty Tip framework to navigate volatility while staying aligned with secular growth cycles.
What Drives NHPC’s Transformational Outlook
| Growth Driver | Impact |
|---|---|
| Capacity Expansion | ~64% YoY increase expected in FY2026 |
| Earnings Visibility | Around 90% EPS growth over FY25–FY27 |
| Project Commissioning | Subansiri Lower hydro project fully commissioned by 4Q |
| New Awards | Four hydro projects and one pump storage project in FY2026 |
The full commissioning of the Subansiri Lower Hydroelectric Project, NHPC’s second-largest project, is a key milestone. Once operational, it is expected to meaningfully enhance generation capacity and improve revenue stability.
Strengths🔹 Large-scale hydropower portfolio. 🔹 Strong project execution track record. 🔹 Long-term regulated revenue visibility. |
Weaknesses🔹 Long gestation period for hydro assets. 🔹 Exposure to hydrological variability. 🔹 High capital intensity. |
Beyond FY2026, CLSA believes NHPC’s growth story could solidify over the next decade as hydropower and pump storage assets play a critical role in India’s renewable energy transition and grid stability.
Opportunities🔹 Rising need for grid-balancing solutions. 🔹 Expansion into pump storage projects. 🔹 Policy support for renewable integration. |
Threats🔻 Project execution delays. 🔻 Regulatory or tariff changes. 🔻 Climate-related variability. |
CLSA’s high-conviction stance suggests that FY2026 is not just another growth year for NHPC, but a defining phase where scale, earnings, and strategic relevance converge.
Investor Takeaway
Derivative Pro & Nifty Expert Gulshan Khera, CFP®, believes that NHPC stands at the cusp of a structural transformation driven by capacity expansion and long-term earnings visibility. CLSA’s outlook highlights how patient capital in infrastructure themes can be rewarded when execution milestones are achieved. Investors should focus on commissioning progress and project awards rather than short-term price movements. For continued analysis on power and infrastructure themes, readers can access free insights at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
Related Queries on NHPC and Power Sector Outlook
Why is CLSA bullish on NHPC?
How capacity expansion impacts NHPC earnings?
What is Subansiri Lower hydro project?
Why pump storage is important for renewables?
Is NHPC a long-term power sector play?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
Written by Indian-Share-Tips.com, which is a SEBI Registered Advisory Services
