NHPC shares experienced a decline of 2.01%, closing at ₹75.89, despite the company reporting strong quarterly financial performance. The stock movement reflects market dynamics affecting the Nifty Midcap 150 constituent.

Quarterly Performance Shows Strong Growth

The company's Q2 FY26 results demonstrated robust growth across key financial metrics. NHPC's consolidated quarterly performance shows consistent improvement in recent periods.

Revenue for Q2 FY26 reached ₹3,365.26 crore, representing a 10.27% increase from ₹3,051.93 crore in the corresponding quarter of the previous year. Net profit showed even stronger growth, rising 14.06% to ₹1,219.19 crore from ₹1,068.93 crore year-over-year. Earnings per share improved to ₹1.02 compared to ₹0.90 in September 2024.

Annual Results Present Mixed Picture

While quarterly performance remained strong, the annual results for FY25 showed contrasting trends. The company's consolidated annual financial metrics reveal both growth and challenges.

Annual revenue for FY25 increased 7.76% to ₹10,379.86 crore from ₹9,632.16 crore in FY24. However, net profit declined 15.27% to ₹3,409.37 crore from ₹4,023.61 crore in the previous year. Earnings per share decreased from ₹3.61 to ₹2.72, while return on equity dropped to 7.57% from 9.36%.

Corporate Actions and Strategic Developments

NHPC announced significant corporate developments during the period. On January 8, 2026, the board approved the General Information Document and Key Information Document for issuing Unsecured, Redeemable, Taxable, Non-Convertible, Non-Cumulative AH-Series Bonds worth up to ₹2,000 crore through private placement.

The company also declared a final dividend of ₹0.51 per share (5.1%) on May 20, 2025, with an effective date of August 14, 2025. As of January 16, 2026, market analysis indicates a neutral sentiment on the stock despite the recent quarterly performance improvements.

Global brokerage CLSA has issued a strong recommendation for nhpc Ltd, projecting significant upside potential backed by capacity expansion and improving earnings visibility. The firm maintains a high conviction positive stance on the hydropower PSU, expecting 2026 to mark a turning point for the company's growth trajectory.

CLSA's Price Target and Investment Rationale

CLSA has set a price target of ₹117 for NHPC Ltd, representing a potential 41% upside from the stock's closing price of ₹83.00. The global firm maintains a "High Conviction" rating on the stock, with analysts suggesting the stock could potentially exceed this valuation.

Projected Financial Performance

CLSA expects 2026 to deliver exceptional financial performance for NHPC. The brokerage projects EPS growth of nearly 90%, driven by operating leverage, higher generation from new projects, and improving tariff visibility. This sharp earnings expansion is expected to strengthen profitability over the medium term.

The firm anticipates 2026 to be transformational in terms of scale, with installed capacity likely to expand approximately 64% year-on-year. This significant capacity addition is set to enhance generation capability, support revenue growth, and reinforce the company's long-term expansion strategy.

Key Growth Drivers and Project Pipeline

The full commissioning of NHPC's second-largest project, the Subansiri Lower Hydropower Project, is expected by the fourth quarter and represents a major growth catalyst. Once operational, this project will significantly boost generation capacity, improve revenue visibility, and enhance earnings to support medium to long-term growth prospects.

The company is positioned to secure four hydropower projects and one pumped storage project in 2026, which could substantially enhance capacity addition plans. These project awards are expected to improve earnings visibility, strengthen the project pipeline, and support long-term growth prospects extending into the next decade.

Company Profile and Current Operations

NHPC Limited operates as a Navratna public sector undertaking and serves as the Government of India's leading hydroelectric power company. The company's core business encompasses generation and sale of bulk power to multiple utilities across the country, while also providing project management, construction and consultancy services, and participating in power trading activities.

As of Q3 FY25, NHPC maintains an installed capacity of 7,233 MW, including hydro and renewable sources. The company stands as one of India's largest hydropower producers, operating 6,971 MW of hydropower capacity representing approximately 15% of the country's total hydropower generation. NHPC operates 28 power stations strategically located across 15 states and 2 union territories.

Recent Financial Performance

NHPC's latest quarterly results demonstrate solid operational performance. Revenue from operations grew 10.20% to ₹3,365.00 crore compared to the corresponding quarter in the previous financial year. Net profit showed stronger momentum with 15% growth to ₹1,219.00 crore, resulting in EPS growth to ₹1.02 per share in Q2 FY26.

The company maintains an attractive dividend payout ratio of 64%, reflecting its commitment to shareholder returns. NHPC's shares have delivered substantial returns over the long term, providing 232% returns over the last five years, demonstrating the stock's strong performance track record in the hydropower sector.