On this page ▾
The market expects NHPC to do better than it ever has.
At today’s share price, buyers are assuming NHPC earns about 16.8% a year on the money invested in it, from here on. Over the last ten years it actually earned about 10.5% a year. So the share price only makes sense if the business improves on its own track record. If it simply carries on as before, buyers today have paid for something they will not get.
- How it is valued: Excess return — the correct lens for a regulated utility.
- What the price assumes: 16.8% return on equity, against 10.5% the model takes from its own record.
- Ten-year record: Between FY2018 and FY2026, NHPC's revenue went from ₹7,751 crore to ₹11,615 crore — it compounded at about 5% a year over 8 years.
- Biggest swing factor: New projects. Main risk: Project delays.
01Dams, regulated returns and long timelines
NHPC, majority-owned by the Government of India, is the country's largest hydropower company, with power stations in Himachal Pradesh, Jammu and Kashmir, Uttarakhand, Sikkim and the north-east. Most of its plants earn a regulated return on equity.
It is completing large projects such as Subansiri Lower in Arunachal Pradesh and Assam, and expanding into solar, wind and pumped storage.
02What the market is assuming
Work backwards from today's share price and you can see what buyers are quietly taking for granted. Here is the return on equity that price implies for NHPC, next to what the model assumes from the company's own record.
The further apart these two numbers are, the bigger the bet a buyer at today's price is making.
03NHPC's record, in plain numbers
Between FY2018 and FY2026, NHPC's revenue went from ₹7,751 crore to ₹11,615 crore — it compounded at about 5% a year over 8 years. Net profit grew from ₹2,775 crore to ₹4,220 crore, about 5% a year — roughly in step with revenue. In FY2026 it kept 36.3% of revenue as net profit — against a low of 31.6% in FY2019 and a high of 41.8% in FY2024. The latest year added 11.9% to revenue, well ahead of its own long-run pace.
Revenue and earnings per share in ₹, return on equity and leverage as ratios — all from the filed statements.
Revenue and net profit by year (₹ crore)
| Year | Revenue | Net profit | Margin |
|---|---|---|---|
| FY2018 | 7,751 | 2,775 | 35.8% |
| FY2019 | 8,983 | 2,836 | 31.6% |
| FY2020 | 10,008 | 3,325 | 33.2% |
| FY2021 | 9,648 | 3,582 | 37.1% |
| FY2022 | 9,189 | 3,774 | 41.1% |
| FY2023 | 10,607 | 4,235 | 39.9% |
| FY2024 | 9,632 | 4,028 | 41.8% |
| FY2025 | 10,380 | 3,412 | 32.9% |
| FY2026 | 11,615 | 4,220 | 36.3% |
04How NHPC gets valued — and why
Excess return — the correct lens for a regulated utilityA rate-regulated utility earns an allowed return on a regulated asset base, so capex builds the earning base rather than draining owner cash. A cash-flow model charges that capex and credits none of the regulated earnings it buys, so this is valued on excess return over its book.
05What decides NHPC's value
New projects
Commissioning big dams adds regulated equity.
Rainfall and snowmelt
Water availability affects generation.
Allowed returns
The regulated return on equity drives profit.
Pumped storage
Storage for renewables could become a new business.
06What could go wrong
- Project delays. Hydro projects often run years late and over budget.
- Geology and floods. Himalayan projects face natural hazards.
- Regulatory resets. Lower allowed returns would cut value.
07What the full NHPC valuation shows
Sign in free to see the complete NHPC valuation
- ✓Fair value per share — from the excess-return model used for regulated utilities
- ✓The utility workpaper — regulated book, allowed return and cost of equity, step by step
- ✓Bull, base and bear cases — and exactly which assumptions move between them
- ✓Peer comparison — against NTPC, Power Grid and other utilities
- ✓Downloadable report — the full write-up, yours to keep
08Questions people ask about NHPC
What does NHPC do?
It builds and operates hydroelectric power stations, mostly in the Himalayas.
What is Subansiri Lower?
A large NHPC hydro project on the Arunachal Pradesh–Assam border.
Why is NHPC valued as a regulated utility?
Its capex builds the regulated base it earns a set return on.
Is NHPC overvalued?
At ₹76 the market is pricing in roughly 16.8% sustained ROE, against the ~10.5% its own record supports. That is more than it has delivered, so the price is justified only if the business can hold a rate it has not previously sustained.
What is the intrinsic value of NHPC?
It is computed from the filed financial statements using the method that fits this business (excess return), with every assumption shown alongside the result. The per-share figure and the full working are in the report.
How much debt does NHPC carry?
Debt to equity stands at 1.47, against 0.99 at the start of the period — the balance sheet is a core input to the cost of capital used here.