NHPC share price target: 14 catalysts; last chance to buy cheapest clean green stock, says CLSA

CLSA on Monday said investors have the last chance to buy what it called the cheapest 100 per cent clean green stock NHPC Ltd, which is trading in the Rs 60-69 range, as it finds 14 visible catalysts that may drive FY27 earnings by 59 per cent. CLSA said there is improved visibility on another 45 per cent earnings growth in FY28 and a decadal double-digit growth ahead.

CLSA said the best is yet to come for NHPC as it suggested a high conviction 12-month target of Rs 117 on the stock, implying at 60 per cent potential upside.

"We believe India's resolve to use the Indus & Arunachal River water to reach net-zero will drive a decade of growth for NHPC. NHPC is down c.18 per cent on a government & retail sell-down, while FIIs have lifted their stake 290bps. With a step-change in REE, we forecast 100 per cent higher EPS and its ROE to expand 810 bps over FY26-29CL. A 50 bps higher risk-free rate (Rf) would shave off 10 per cent of our valuation, while having no impact on its P&L on regulatory pass- through," it said.

The foreign brokerage cited catalysts including a recovery from under-recovery of tariffs as the regulator is set to declare tariff orders (TO) for its Parbati and Subansiri projects in the second half of FY27. It also cited the start of another 890MW of hydro capacity and the award of large projects improving decadal double-digit growth.

"NHPC has negotiated El Niño well, with 20 per cent growth in 1HFY27 generation. We believe the best is yet to come in the second half with the start of Teesta V HEP, 500MW at SL HEP & tariff orders. We forecast REE (ex-minority) growth of 90 per cent over FY26-30CL vs 31 per cent growth over the past five years. With a step-change in REE, we forecast a 100 per cent higher EPS & its ROE to expand 810 bps," CLSA said.