NHPC Shares Decline Amidst Broader Market Downturn

On 17 October 2024, NHPC shares witnessed a decline of 0.62%, trading at ₹87.54 as of 11:04 AM IST. This fall in share price is part of a broader trend observed in the market, with the Sensex also decreasing by 0.42% to ₹81,162.98.

Throughout the trading day, NHPC shares fluctuated between a high of ₹88.81 and a low of ₹87.1. The stock is currently trading below several key short-term and long-term simple moving averages (SMA), which may suggest ongoing bearish momentum. The 5, 10, 20, 50, 100, and 300-day SMA figures are reported as 90.99, 91.72, 93.11, 95.46, 99.62, and 93.05 respectively.

Trading volume is another critical aspect to watch, with transactions on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) being 63.10% lower than the prior session. A decrease in both price and volume often indicates a less sustainable and temporary movement.

From a fundamental evaluation, NHPC boasts a return on equity (RoE) of 9.58% and a price-to-earnings (P/E) ratio of 24.46. Notably, the company has no promoter holding, while mutual funds (MFs) hold 5.22% and foreign institutional investors (FIIs) increased their stake from 6.80% to 8.96% over the past quarter.

In comparison to NHPC, other companies in the sector experienced mixed results: Adani Energy Solutions, Torrent Power, and SJVN witnessed declines, while others rose modestly. Despite these fluctuations, the broader market indicators—Nifty and Sensex—each decreased by 0.49% and 0.42% respectively.

Meanwhile, analysts at Ventura have extended a positive outlook on NHPC with a “buy” recommendation. They have set a 24-month price target of ₹176, suggesting potential significant gains if the anticipated growth materializes. Ventura’s analysis underscores the company’s growth potential, supported by increased government backing for hydroelectric projects and adherence to a cost-plus Return on Equity (RoE) framework.

NHPC is recognized as India‘s sole fully “green” public sector power producer, with a hydroelectric capacity of 7 gigawatts, accounting for 15% of the national hydro output. The firm is currently expanding its capacity to 12 gigawatts by March 2028, expecting to capture 20% of the national market share alongside solar and wind projects reaching 1.6 gigawatts over five years.