NHPC: (Neutral; 12-month TP: Rs31, potential downside 3%) : Goldman Sachs

Visit http://indiaer.blogspot.com/ for complete details 􀂄 􀂄


NHPC: (NHPC.BO; Neutral; 12-month TP: Rs31, potential downside 3%)
 We upgrade NHPC to Neutral from Sell purely on valuation (see Exhibits 20, 21&
24). The stock has underperformed the index over last 6 months and we believe
the NHPC share price already reflects the underlying execution risks.
 We believe commissioning of the new capacities is the key driver of the stock price.
 We rolled over to FY12E and raise our 12-month DCF based target price to Rs31
(from Rs27) implying potential downside of about 3%. We revise our
FY11E/12E/13E EPS by 4%/3%/1% to reflect 1QFY11 results.
 Since we added NHPC to the Sell list on April 20, 2010, the stock has increased by
4.1% (vs. BSE Sensex up 15.5%). Over the last 12 months, the stock has decreased
2.7% (vs. BSE Sensex up 20.1%) (see Exhibit 102).
 Key risks include faster/slower than expected commissioning of capacity.