NHPC Limited

Utilities — Utilities - Renewable · NSE

₹71.44−₹1.26 (−1.73%)

DalalBaazaar Score

50 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

Driven by moderate debt load, negative free cash flow.

In simple words: The business is earning a fairly low return on the money invested in it, with modest growth. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:57 pm

Understanding the Business

Company site ↗

The 60-second version of NHPC Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

NHPC Limited, together with its subsidiaries, engages in the generation, sale, and trading of electricity through hydro, wind, and solar power stations in India and Nepal. It also owns and operates power stations.

IndustryUtilities - Renewable

SectorUtilities

Employees4,634

Annual revenue₹11,123 Cr

How does it make money?

Turns over ₹11,123 Cr a year. Of every ₹100 of sales, about ₹34 reaches shareholders as profit, with ₹76 left at the operating level before interest, tax and depreciation. Each of its 4,634 employees supports ₹2.40 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.40 Cr

Who are its competitors?

The closest listed comparisons in its industry are NTPC LTD, POWER GRID CORP. LTD., TATA POWER CO LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 5.8% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE13.7%

What is the outlook?

6 analysts covering the stock expect revenue to grow about 37.2% and earnings to grow about 18.5% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+37.2%

Est. earnings growth+18.5%

Analysts6

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +6% while net margin moved -9% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+6%

Margin effect-9%

DalalBaazaar Score

50/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 2.0% — barely ahead of inflation
✗ Profit has declined at 1.2% a year

Quality vs. Valuation

Company Quality

43/ 100

Weak

How good the business is, ignoring the share price entirely.

Valuation

54/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

18.9x

3Y Median

24.0x

40 monthly readings · mean 23.1x · range 12.9x–28.9x

Sector Median

14.6x

median of 3 sector peers

🟢Current valuation is approximately 21% below its 3y median of 24.0x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

⚠️Against its sector it trades 29% above the peer median of 14.6x.

vs. its own history

Cheap

24.0x median over 40 months · -21%

vs. sector peers

Expensive

14.6x median of 3 peers · +29%

vs. generic bands

Fair

15x–35x

EV/EBITDA

14.8x

PEG

6.75

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 9.0% to 5.8% — often a sign of competition or overexpansion.

Red Flags

6 items require attention · 4 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 85% over 3 years, from ₹29,540 Cr to ₹54,606 Cr.
🔴Thin interest coverageFinancial
Operating profit covers interest only 1.9x — little room if earnings dip.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Inventory building faster than salesFinancial
Inventory up 82% against revenue up 6% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹8,279 Cr in the latest year.
🟡Margins are compressingFinancial
EBITDA margin is down 4.4 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 21% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 80.2% to 75.8%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 6.5x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
A premium to the sector to defend
It trades 29% above the peer median. That premium needs a reason that persists, or it closes.
Growth barely outpaces inflation
Revenue compounding at 2.0% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Several serious flags at once
4 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 74%✓ 75.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 6.5x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹8,279 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 1.9x
How much operating profit can fall before interest stops being comfortably covered.
5Revenue growth stays above 4% a year✗ 2.0% CAGR
Latest reported year was 18.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.

Investment Checklist

7 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 6 neutral · 2 weak

Market Cap

₹71,762 Cr

Mid Cap

Mid-sized — more growth headroom, but sharper swings than large caps

P/E (Trailing)

18.9x

Fair

Fairly valued against the generic band

P/B Ratio

1.74x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹3.78

Profitable

Profitable on a per-share basis

ROE

9.1%

Moderate

Moderate capital efficiency

ROCE

5.8%

Weak

Low return on total capital employed

Debt/Equity

1.13x

Moderate

Moderate leverage

Revenue Growth (YoY)

18.5%

Healthy

Healthy top-line growth

Profit Growth (YoY)

2.8%

Modest

Slow profit growth

Dividend Yield

2.25%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

-₹8,279 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

11.2x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

46.0%

Good

Healthy core-business profitability

Net Margin

31.1%

Good

Strong bottom-line conversion

Current Ratio

1.04

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.22

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

73.9 / 75.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

30.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹10,479 Cr	₹9,252 Cr	₹10,374 Cr	₹11,123 Cr	+2.0%
EBITDA	₹8,405 Cr	₹7,758 Cr	₹8,411 Cr	₹8,432 Cr	+0.1%
EBITDA Margin	80.2%	83.8%	81.1%	75.8%	—
PAT (Net Profit)	₹3,903 Cr	₹3,596 Cr	₹3,007 Cr	₹3,766 Cr	-1.2%
EPS	₹3.89	₹3.58	₹2.99	₹3.75	-1.2%
ROE	10.6%	9.3%	7.6%	9.1%	—
ROCE	9.0%	8.4%	8.4%	5.8%	—
Total Debt	₹29,540 Cr	₹32,776 Cr	₹41,806 Cr	₹54,606 Cr	+22.7%
Free Cash Flow	-₹271 Cr	₹283 Cr	-₹3,825 Cr	-₹8,279 Cr	—

🟢 Revenue has grown at 2.0% a year over 3 years.

🟡 EBITDA has been broadly flat over 3 years (0.1% a year).

🔴 EBITDA Margin has fallen from 80.2% to 75.8% over 3 years (-4.4 pts).

🟡 PAT (Net Profit) has been broadly flat over 3 years (-1.2% a year).

🟡 EPS has been broadly flat over 3 years (-1.2% a year).

🔴 ROE has fallen from 10.6% to 9.1% over 3 years (-1.5 pts).

🔴 ROCE has fallen from 9.0% to 5.8% over 3 years (-3.2 pts).

🔴 Total Debt has grown at 22.7% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1.20 L Cr

Total Liabilities

₹71,606 Cr

Cash & Equivalents

₹1,847 Cr

Operating Cash Flow

₹3,294 Cr

Capex

-₹11,572 Cr

Shareholding (proxy)

Institutional Holding

22.2%

Insider Holding

62.5%

Corporate Actions

Next Earnings

05 Nov 2026

Dividend Rate

₹1.61

Ex-Dividend Date

12 Aug 2026

Analyst Consensus

Recommendations

4 Buy · 0 Hold · 3 Sell

Target Price (Mean)

₹86

+20.4% vs CMP

Target Range

₹72 – ₹117

Peer Comparison

Company	P/E	ROE
NTPC LTD	11.0x	13.7%
POWER GRID CORP. LTD.	14.6x	15.8%
TATA POWER CO LTD	29.3x	9.8%

Recent News

1 positive4 mixed1 general

NHPC (NSEI:NHPC) Stock Forecast & Analyst Predictions

Simply Wall Street, 16 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

NHPC Share Price Pares Gains After Revised Plan To Borrow Rs 6,900 Crore Gets Board Nod

NDTV Profit, 17 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Energy stocks dividend leaderboard: Power Grid, NTPC, SJVN, NHPC or IREDA - Which power stock beats the rest on yield?

Livemint, 18 OctCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

NHPC Share Price Declines: Technical and Fundamental View

Univest, 28 AugPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Nepal floods impact: Emami shares slip 4%, NHPC down 1%; what investors need to know

Upstox, 27 AugPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

NHPC Ltd. OFS Opens for Retail Investors; Government Divests 6% Stake at ₹71 Floor Price

Groww, 03 Jun

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongValuation

MiddlingBusiness Quality · Profitability · Risk

WeakFinancial Health · Growth

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 4 high-severity red flags sit above this conclusion and should be read first.

4 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; Interest cover stays above 3x; Revenue growth stays above 4% a year · see Key things to watch ↑