NHPC shares fell 28% from record high in seven days, can they exit bear grip?

Shares of NHPC have lost 28% from their record high in seven sessions. The NHPC stock, which hit a record high of Rs 115.85 on February 5 this year fell to a low of Rs 83 in Wednesday’s trade, falling 28.34% during the  period. Of the 28% loss, the NHPC shares slipped 14% in the last three sessions after the state-owned hydropower producer announces its Q3 earnings on February 12. In fact, the stock hit an intraday low of Rs 77.71, falling 19% on Monday. The decline in the stock was in line with the Q3 results of NHPC.

NHPC reported a 26.77 per cent decline in its Q3 consolidated net profit at Rs 491.90 crore as against Rs 671.67 crore in the corresponding period last fiscal. Revenue from operations fell 20.42 per cent in the last quarter compared to Rs 2,055.50 crore in the year-ago period.

In the current session, the NHPC stock ended 4.31% higher at Rs 89.50 on BSE.

Market cap of the firm stood at Rs 89,903 crore.   

NHPC saw 225.41 lakh shares changing hands amounting to a turnover of Rs 194.47 crore on BSE.

In terms of technicals, the relative strength index (RSI) of the stock stands at 51.4, signaling it's trading neither in the overbought nor in the oversold zone.

NHPC shares are trading lower than the 5 day, 10 day and higher than the 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.

The stock has gained 120 per cent in one year and risen 33.70 per cent in 2024.  

Kotak Institutional Equities has assigned a value of Rs 60 and downgraded the NHPC stock.

"We downgrade NHPC to SELL (from ADD), owing to the sharp stock performance in the past quarter (56%), taking valuations to 2X P/B and 16X P/E on FY2025E. We raise fair value to Rs 60/share (from Rs 55/share), owing to the rollover to March 2026 valuations and giving credit for the money spent on underconstruction projects. We highlight that hydro projects have traditionally seen inordinate delays in commissioning due to execution challenges, and we see constraints on earnings growth beyond Subansiri and Parbati," the brokerage said.

JM Financial has assigned a target of Rs 91 per share post Q3 earnings. 

"With a dividend yield of 2.5%, and nation’s priority to enhance hydropower due to its load following ability for grid balancing and pumped hydro storage in place, we continue to maintain our BUY rating on the ‘only’ large utility with 100% green energy portfolio with a target price of Rs 91/share (SOTP-based), implying 10x FY26 blended EV/EBITDA and 1.9x FY26 P/B," said the brokerage. 

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