This PSU stock can double in the next four years, CLSA says

Brokerage firm CLSA has upgraded shares of state-run NHPC Ltd. to a “high conviction outperform” on Thursday, February 20. The brokerage had an “outperform” rating on the stock earlier as well.CLSA has a price target of ₹117 on the stock, which is marginally lower from ₹120 earlier.

The brokerage expects shares of NHPC to double over the next four years, adding that a 25% correction in the last six months gives investors an inexpensive opportunity to accumulate the stock.

Shares of NHPC are down 37% from their peak of ₹118.
CLSA wrote in its note that the start of the Parbati 2 Hydro Project boosted its regulated equity by 27% in the first quarter of the financial year.NHPC also plans to enter into the shorter-duration regulated pump storage segment. It plans on investing ₹84,000 crore to build 20 GW of pumped storage capacity.

CLSA expects a 2x regulated equity over financial year 2024 – 2028 for NHPC as large projects reaching fruition will drive Earnings Per Share (EPS) growth for the company going forward.

Out of the 10 analysts that have coverage on NHPC, five of them have a “buy” rating, two say “hold”, while three have a “sell” rating.

Shares of NHPC are trading 4% higher at ₹77.75 on Monday. The stock is down 5% so far in the first two months of the year.