Why Does CLSA See NHPC Entering a Decadal Growth Transformation?
About NHPC
NHPC Limited is India’s largest hydropower generation company and a key pillar of the country’s renewable and clean energy strategy. With a strong public-sector balance sheet and long-life assets, NHPC has traditionally been viewed as a stable but slow-growing utility.
However, CLSA believes this perception is set to change meaningfully over the next two years as multiple large projects move from construction to commissioning.
According to CLSA, FY26 marks an inflection point for NHPC. The brokerage expects the company’s installed capacity to expand by nearly 64 percent year-on-year, driven by the commissioning of long-pipeline hydro assets and the award of new projects.
CLSA’s High-Conviction Thesis
🔹 Capacity addition of ~64% YoY in FY26.
🔹 EPS growth visibility of ~90% over FY25–FY27.
🔹 Full commissioning of Subansiri Lower project.
🔹 Award of four hydro and one pump storage project.
The Subansiri Lower Hydro Project, NHPC’s second-largest project, has been under development for several years and faced execution and regulatory delays. CLSA expects full commissioning by Q4 FY26, which alone could materially lift earnings and cash flows.
Power-sector focused traders often align directional exposure through a Nifty Trading View approach during capacity-led earnings inflection cycles.
Growth Visibility Snapshot
| Metric | FY25–27 Outlook |
|---|---|
| Installed Capacity | ~64% YoY expansion |
| EPS Growth | ~90% cumulative |
Beyond Subansiri, NHPC is also expanding into pumped storage projects, which align well with India’s renewable energy balancing requirements. Pumped storage assets provide grid stability and are expected to see increased policy support.
|
Strengths
🔹 Long-life regulated assets. 🔹 Strong balance sheet. 🔹 High earnings visibility. |
Weaknesses
🔹 Execution delays historically. 🔹 Weather dependency. |
With policy emphasis on renewable integration, NHPC’s asset mix is increasingly relevant. The commissioning cycle should also improve return ratios and dividend sustainability.
|
Opportunities
🔹 Pumped storage expansion. 🔹 Grid balancing demand. |
Threats
🔹 Project execution risks. 🔹 Regulatory delays. |
Valuation & Investment View
CLSA maintains a target price of ₹117 with a high-conviction Outperform rating. The brokerage believes FY26–FY27 will fundamentally reset NHPC’s growth trajectory and investor perception.
Sector rotation participants often monitor PSU utilities using a BankNifty Trading View.
Investor Takeaway
Derivative Pro & Nifty Expert Gulshan Khera, CFP®, believes NHPC is transitioning from a steady utility to a growth-oriented renewable platform. Capacity commissioning and pumped storage optionality could redefine its earnings trajectory. More detailed insights are available at Indian-Share-Tips.com.
SEBI Disclaimer: The information provided is for informational purposes only and should not be construed as investment advice.
Written by Indian-Share-Tips.com, which is a SEBI Registered Advisory Services
