Motilal Oswal maintains neutral on NHPC, target price Rs 25

Motilal Oswal has maintained its Neutral stance on NHPC in the long term with a target price of Rs 25. Shares of NHPC closed at Rs 23.5 apiece on Wednesday, up 0.86% while the BSE Sensex closed 181.94 points up at 40,651.64.

Company Financials

For the quarter ended 30-09-2019, the company has reported consolidated sales of Rs 3068.42 crore, up 17.57 % from last quarter sales of Rs 2609.95 crore and up 13.75% from last year same quarter sales of Rs 2697.63 crore.

The company has reported net profit after tax of Rs 1456.56 crore in the latest quarter.

Investment Rationale

The construction of lower Subansiri project has restarted from October, which is a positive for the company. However the regulated equity growth of NHPC, which has been key driver for earnings, will be muted for the next few years as no new projects are being commissioned.