NHPC shares are likely to remain on investors' radar after CLSA issued a 'high-conviction outperform' call on the stock, citing a sharp step-up in capacity and decisive improvement in earnings visibility from FY26. The brokerage has set a target price of ₹117.00 per share, implying an upside of over 42% from Thursday's closing level of ₹82.00.

Capacity Expansion to Drive Growth

At the heart of CLSA's bullish view is its expectation that FY26 will mark an inflection point for NHPC's scale and growth trajectory. The brokerage believes the company's installed capacity could rise by as much as 64% year-on-year in FY26, setting the stage for a stronger earnings profile over the medium term.

CLSA expects this expansion phase to translate into a sharp improvement in profitability, projecting nearly 90% growth in earnings per share over FY25-27. The brokerage added that FY26 should solidify NHPC's decadal growth story as long-pending projects begin contributing meaningfully.

Corporate Actions Strengthen Financial Position

Recent corporate actions have added to investor interest in the stock. NHPC's board has approved fund-raising of up to ₹2,000.00 crore through the issuance of non-convertible, non-cumulative AH-Series bonds in one or more tranches via private placement, as part of its FY26 borrowing plan.

The move is seen as strengthening the company's financial flexibility ahead of a heavy execution phase and has been one of the triggers behind recent activity in the stock.

Key Operational Catalysts

A key operational catalyst highlighted by CLSA is the full commissioning of the Subansiri Lower Hydro Project—NHPC's second-largest project—by the fourth quarter of FY26. Beyond this, the brokerage expects the award of four hydropower projects and one pumped storage project during 2026, which could further strengthen visibility on long-term growth.

Stock Performance and Market Position

NHPC's recent stock performance has been relatively muted, up about 5% over the past year compared with a roughly 10% rise in the Nifty 50. However, CLSA sees NHPC as a scale-up and execution-led opportunity, positioning the company for significant growth as capacity expansion materializes and earnings visibility improves.

Brokerage firm CLSA has issued a 'High conviction outperform' rating on state-run NHPC Ltd. with a price target of ₹117.00 per share, indicating a potential upside of approximately 43% from the stock's Thursday closing price. The brokerage firm anticipates 2026 to be a transformative year for the hydroelectric power company.

Growth Projections and Expansion Timeline

CLSA expects significant operational and financial improvements for NHPC in the coming years. The brokerage projects the company's installed capacity to expand by 64% year-on-year, while earnings per share are estimated to grow by 90% over the FY25 to FY27 period. This growth trajectory is expected to strengthen NHPC's long-term expansion story spanning the next decade.

Three Key Growth Catalysts

The brokerage has identified three primary catalysts that could drive the stock's performance:

The third catalyst involving new project awards could potentially improve earnings and growth visibility until FY35, providing long-term revenue streams for the company.

Analyst Coverage and Market Performance

Currently, eight analysts track NHPC stock with varying recommendations. The analyst coverage breakdown shows mixed sentiment across the Street:

CLSA's ₹117.00 target represents the highest price target among analysts, while ICICI Securities maintains the lowest target at ₹72.00. NHPC shares closed Thursday's trading session at ₹82.00, down 1.98% for the day. The stock is currently trading 11% below its 52-week high of ₹92.34.

Market Positioning

The brokerage's optimistic outlook on NHPC reflects confidence in the company's project execution capabilities and the potential for significant capacity additions. The projected 64% expansion in installed capacity represents a substantial scaling of operations, while the anticipated 90% growth in earnings per share over the two-year period suggests strong profitability improvements ahead.