14% Dividend Payout: Maharatna Stock Below Rs 100 Fixes Record Date; JM Financial Recommends BUY

Maharatna company, NHPC's share price gained by as much as over 8% on February 13 after its Q3 results and interim dividend recommendation. The stock currently trades below Rs 100. Brokerage JM Financial recommends buying NHPC due to the company's sustainability of being the 'only' large utility with a 100% green energy portfolio.

NHPC Share Price:

On BSE, NHPC shares closed at Rs 85.80 apiece, up by 5.9% on Tuesday with a market cap of Rs 86,186.40 crore.

NHPC shares have skyrocketed by 127% from its 52-week low of Rs 37.80 apiece. While its 52-week high is at Rs 115.84 apiece.

NHPC Dividend:

The company approved an interim dividend of Rs 1.40 per share on the face value of paid-up equity shares of Rs 10/- each for the financial year 2023-24. In percentage terms, the dividend payout is to the tune of 14%.

The company fixed February 22, 2024, as the record date for determining eligible shareholders. The interim dividend shall be paid/ dispatched within the period as stipulated in the Companies Act, 2013.

NHPC Q3 Results:

Revenue from operations stood at Rs 2,055.50 crore, on a consolidated basis, in Q3FY24, lower from Rs 2,582.76 crore in the same quarter a year ago, and Rs 2,931.26 crore in the preceding quarter.

Consolidated PAT was at Rs 628.44 crore in Q3FY24, also declining from Rs 775.99 crore in Q3FY23 and Rs 1,693.2 crore in Q2FY24.

Should You Buy NHPC Shares?

In its research note, JM Financial said, "NHPC reported consolidated net revenue of INR 20.6bn (-20% YoY, -14% Cons, -12% JMFe). EBITDA stood at INR 7.2bn (-58% YoY, -49% Cons, -49% JMFe), Adj PAT at INR 4.9bn (-27% YoY, -26% Cons, -16% JMFe). Underperformance and sharp variance are due to flash floods in river Teesta (Oct'23) resulting in material damage & consequential business loss (INR 4.9bn) in Teesta- 3,4,5 power stations, both of which are majorly recoverable post insurance settlement expected by Q1FY25."

Further, JM's note said, "With significant hydro capacity addition expected by FY26/FY27 (800 MW Parbati-II, 2000MW Subansiri Lower, 120MW Rangit-IV, 624MW Kiru) and 1135MW Solar, the installed capacity with regulated return is set to grow 50% by FY26/FY27, after a gap of 3 years resulting in Revenue/EBITDA/PAT CAGR of 20%/24%/11% over FY23-26E."

Also, with a dividend yield of 2.5%, and the nation's priority to enhance hydropower due to its load following ability for grid balancing and pumped hydro storage in place, JM's note added, we continue to maintain our BUY rating on the 'only' large utility with a 100% green energy portfolio with a TP of INR 91/sh (SOTP-based), implying 10x FY26 blended EV/EBITDA and 1.9x FY26 P/B."

NHPC has commissioned a 380 MW Solar Power Project at Neemba, Fatehgarh, Raj, making a cumulative commissioned capacity of 700 MW out of a total 2000MW awarded earlier. Additionally, NHPC has awarded 3000 MW ISTS-connected solar power projects to 8 developers with a discovered tariff of INR 2.52/unit for 250 MW and INR 2.53/unit for 2750 MW.

Additionally, NHPC signed an MOU with Andhra Pradesh Power Generation Corp (APGENCO) for the Implementation of two Identified Pumped Hydro Storage Projects namely Kamlapadu-950 MW and Yaganti1000 MW PSPs in the first phase.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author or Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.