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ICICI Securities Report
NHPC Ltd. has reported muted result in Q2 FY25. While standalone revenue grew 3% and Ebitda grew 2% YoY, profit after tax was down 37% YoY on lower deferred tax component. Higher tax credits utilised during Q2 FY24 cushioned the earnings from tax's impact to good extent which was not the case in Q2 FY25.
Teesta-V power station is still non-operational and is expected to operationalise towards the end of FY26. While generation loss and resultant under-recovery till Sep-24 is covered under insurance, under-recovery from thereon (estimated at Rs 4-5 billion annually) will have a bearing on earnings for next five-six quarters. The stock has corrected over 30% in last three-four months.
We estimate limited downside from current levels and upgrade to Reduce from Sell with target price of Rs 75.
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