This company is good for investing purpose or not ?
Let’s start with the Company profile
Company Profile :
NHPC Limited is engaged in electricity generation through hydroelectric power plants.
Now Let’s check the important fundamental figures of this company. This is a mid cap company with Market Cap ₹31,390cr. We can check more fundamental details below in depth:
Company Fundamental Detail :
PE Ratio: 9.64
Sector PE Ratio: 25.60
PE Ratio of this company is low but better than Sector’s PE. So it’s a Good PE than the peers of this company.
PB Ratio : 0.87
Sector PB Ratio : 2.84
PB Ratio of this company is low than Sector’s PB ratio. So it’s Below Average PB than the peers of this company.
Dividend Yield : 5.12%
Sector Dividend Yield : 1.53%
Dividend Yield of this company is high than Sector. Dividend of this company is Good than the peers of this company.
ROE (Return on equity) and ROCE (Return on capital equity) is Below Average
According to above data, this company is looking fundamentally average. Now We’ll check the company Financially data:
Company Financial Detail
We should check now liabilities of company also in the below table
Total Current & Non Current Liabilities
Liabilities of a company refers to the debt of that company. We should also aware the debt of company. In 2021, Company have 37,247.02 Cr. debt.
Let’s check the Free Cash flow of the company
Free Cash flow
Debt Level: NHPC’s net debt to equity ratio (58.6%) is considered high.
Reducing Debt: NHPC’s debt to equity ratio has increased from 58.3% to 65.7% over the past 5 years.
Debt Coverage: NHPC’s debt is well covered by operating cash flow (25.7%).
Interest Coverage: NHPC’s interest payments on its debt are well covered by EBIT (15x coverage).
Share Holding Pattern
|Promotor Holding||Foreign Institution|
|Other Domestic Institutions||Retail & Others|
Above table showing there is no big change in Promotors holding which is 70.95% in June 2021. FIIs invested in June 2021 with 5.06% and retail investor is 8.18%.
Now We’ll check the return of the company, This company started from Rs. 36.35 at 2 Sep 2009. This company given 37.97% returns in last 1 year from 2020 to 30 Dec 2021.
Investment Checklist for NHPC Ltd.
- The company is currently profitable
- Has a high level of debt
- Earnings are forecast to grow by an average of 6.2% per year for the next 3 years
- Share price has been stable over the past 3 months
- The company’s earnings are high quality
- Profit margins improved or NHPC became profitable
- They have sufficient analyst coverage
- Shareholders have not been meaningfully diluted in the past year or recently listed
- Revenue is meaningful (₹93B)
- Market cap is meaningful (₹314B)
- NHPC does not have negative shareholders equity.
According to its historical performance we can predict stock target.
Entry Buying Zone : Premium members can see only
Target: Premium members can see only
Time Horizon:Premium members can see only
Risk Profile: Premium members can see only
Entry Buying Zone : 30 to 31
Target: 38 ( 20% Upside)
Time Horizon: 1 Year
Risk Profile: High Risk (Stock is 3.71x as volatile as Nifty)
Hope you liked Our 13th company in the Series of Best Stocks Below Rs. 50. We tried to cover many important things about this company, if you think anything left to cover, you can comment us and we’ll try to cover those things also.
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