NHPC share price declines 10% ahead of Q3 results today. Should you Buy, Sell or Hold the stock?
- Stock Market today: NHPC share price declined over 10% in the morning trades on Monday ahead of Q3 results. The hydropower manufacturer sees improved fundamentals, nevertheless valuations are rich say analysts. The OFS to its employees starting 13th February is also impacting the stock prices.
NHPC share price declined more than 10% ahead of Q3 results on Monday.
The share of NHPC Limited the Indian public sector hydropower company, has given multi-bagger returns to investors gaining almost 2.5 times in last one year, prior to todays fall. The NHPC stock had scaled 52-week highs of ₹115.85 a few days back, however was trading at close to ₹85 levels on Monday.
The multi bagger returns by NHPC had been driven by strong rise in power demand in the country. The power demand has continued to see strong surge post easing of Covid led restriction and impact.
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The overall power demand in the country that rose sharply in FY24 is likely to rise further in FY25. The month of November saw strong peak demand in the back of festival season.
Generation rose 13% YoY to 416 Billion Units in Q3FY24, albeit on a high base of last fiscal (up 10% in FY23). Generation rose a substantial 25% YoY to 150BUs in October, which was characterized by high humidity. November saw an 11% YoY increase in generation to 130BUs, said analysts at Elara Securities India Pvt Ltd.
In addition to rise in power demand the companies are also incurring capex and investing heavily on renewable capacities too point out analysts.
However the corrections in the stock price now has been driven by the rich valuations, pointed out Rupesh Sankhye, Research analyst at Elara Securities India Pvt Ltd. On regulated equity of ₹14000- 15,000 crore the market cap of the NHPC has crossed ₹80,000 crore.
Further the peers as SJVN Ltd also have reported weak results, impacting the investor sentiments.
Overall though fundamentals for companies have improved and so has the company's outlook , however rich valuations are not pulling down the stock prices said analysts,
In addition, the offer for sale of shares by President of India to eligible & willing employees of NHPC Limited including its Subsidiaries at a price of 71 is also impacting market sentiments, said analysts. The OFS at Rs.71.00/- per equity share will open from 13.02.2024
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions
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