NHPC Limited: history, ownership, mission, how it works & makes money

A Brief History of NHPC Limited

NHPC Limited, originally established as National Hydroelectric Power Corporation in 1975, primarily focuses on the development of hydroelectric power in India. The organization's headquarters is located in Faridabad, Haryana. As of FY 2022-23, NHPC operates a total installed capacity of 7,071 MW across its various hydroelectric projects.

In the financial year 2022-23, NHPC reported a total revenue of approximately ₹8,268 crore, which marked a growth from the previous year's revenue of ₹7,578 crore. The company achieved a net profit of ₹2,202 crore, representing an increase of around 8.5% compared to the net profit of ₹2,026 crore in FY 2021-22.

NHPC has been actively contributing to India's renewable energy goals. By 2023, the company is set to increase its renewable energy portfolio, aiming for an additional 1,500 MW capacity from projects under development.

NHPC's market capitalization has shown resilience, reaching approximately ₹32,300 crore as of June 2023. The stock price has experienced fluctuations with a high of ₹43.75 and a low of ₹26.90 during the fiscal year 2022-23.

The company operates numerous projects across various states in India, including:

• Tehri Hydro Power Complex
• Uri Hydroelectric Project
• Loktak Hydro Electric Project
• Siang Lower Hydroelectric Project

In addition to its hydroelectric initiatives, NHPC is exploring solar energy projects, including plans for a 100 MW solar power facility in Rajasthan, reinforcing its commitment to diversified renewable energy generation.

Furthermore, NHPC's financial health is underpinned by a healthy operating profit margin of approximately 37% as of FY 2022-23. The company continues to benefit from government policies aimed at increasing renewable energy capacity in the country.

A Who Owns NHPC Limited

NHPC Limited, established in 1975, is a publicly traded company primarily involved in the development and operation of hydroelectric power projects. As of the fiscal year ending March 31, 2023, NHPC has a total installed capacity of approximately 7,071 MW.

The ownership structure of NHPC Limited is predominantly held by government entities, with the Government of India being the largest shareholder. Here is a detailed breakdown of NHPC's ownership as of December 2022:

NHPC's market capitalization stands at approximately ₹30,000 crore as of October 2023. The stock is traded on the Bombay Stock Exchange (BSE) under the ticker symbol NHPC. Over the past year, NHPC's stock has fluctuated, with a 52-week high of ₹44.50 and a 52-week low of ₹29.30.

The revenue for NHPC for the fiscal year 2022-2023 was reported at around ₹10,110 crore, demonstrating a growth of about 8.5% compared to the previous fiscal year. The net profit for the same period was approximately ₹3,650 crore, reflecting a profit margin of around 36%.

As part of the government's initiative to increase renewable energy capacities, NHPC has been actively working on expanding its portfolio. The company has several ongoing projects that are expected to add significant capacity in the coming years. For instance, NHPC is developing the Teesta V project, expected to contribute an additional 510 MW once completed.

The Board of Directors of NHPC consists of various stakeholders from different backgrounds, ensuring a mix of expertise in both finance and engineering. The current Chairman and Managing Director is Ravi Bhatnagar, and there are six other directors representing both governmental and independent sectors.

In terms of dividend policy, NHPC has maintained a strong track record of distributing dividends to its shareholders. In the fiscal year 2022-2023, NHPC declared a dividend of ₹1.60 per share, translating to a dividend yield of approximately 3.8% based on its current market price.

NHPC Limited Mission Statement

NHPC Limited, a leader in hydropower generation in India, articulates its mission statement with a focus on sustainable development and energy efficiency. The company emphasizes its commitment to harnessing renewable energy sources while prioritizing social responsibility and environmental stewardship.

The mission statement of NHPC can be summarized in the following key objectives:

• To become a leader in sustainable energy development.
• To ensure reliable and efficient operations in energy generation.
• To enhance stakeholder value through innovative solutions.
• To contribute to the nation's energy security and climate change mitigation.
• To uphold social responsibility by promoting community development.

In line with its mission, NHPC has made significant strides in expanding its capacity and operational efficiency. As of March 2023, NHPC's total installed capacity stood at 7,071 MW, with projects spread across several states in India.

NHPC’s financial performance reflects its mission-driven approach. In the fiscal year ending March 2023, NHPC reported a total revenue of approximately ₹8,804 crores, with a net profit of about ₹2,192 crores, showcasing growth in both areas from the previous fiscal year.

To further illustrate NHPC's commitment to sustainability and efficiency, the following table outlines key data points related to its operational metrics and goals:

In summary, NHPC Limited's mission statement drives its strategic initiatives and operational goals, ultimately aiming to secure a sustainable future for energy generation in India while also addressing social and environmental concerns.

How NHPC Limited Works

NHPC Limited, a leading Indian hydropower generation company, operates under the Ministry of Power, Government of India. Established in 1975, the company focuses on the investment, development, and operation of hydroelectric power projects. As of March 2023, NHPC has a total installed capacity of 7,071 MW from various hydropower plants.

NHPC operates numerous projects across several states in India, ensuring a diversified approach to energy generation. The company’s operations focus primarily on the following:

• Hydropower Generation: NHPC mainly relies on hydroelectric projects, which utilize renewable resources. In FY 2022-23, NHPC generated approximately 24,200 million units of electricity.
• Project Development: NHPC is actively involved in developing new hydropower projects with a planned capacity of 6,000 MW through various phases.
• Maintenance and Operation: NHPC ensures its plants' efficiency and reliability through regular maintenance schedules, enhancing operational performance.

The company has several notable plants, including:

NHPC’s financial performance, as of FY 2022-23, showcases a steady growth trajectory:

• Revenue: The company reported total revenue of approximately ₹8,500 crores.
• Net Profit: NHPC's net profit for the year was around ₹2,600 crores, reflecting a growth of approximately 15% from the previous fiscal year.
• Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA): The EBITDA stood at about ₹7,000 crores, indicating a margin of approximately 82%.

With a focus on sustainability and renewable energy, NHPC is expanding its portfolio through various initiatives, including:

• Green Initiatives: NHPC is investing in new and innovative hydropower technologies to enhance efficiency and reduce environmental impact.
• Partnerships: The company collaborates with international firms for technology transfer and best practices in project execution.
• Expansion Plans: NHPC has plans to develop new hydropower projects that will add to its existing capacity, contributing to India's renewable energy goals.

In terms of stock performance, NHPC Limited is listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). As of October 2023, the stock has a market capitalization of approximately ₹40,000 crores. Over the past year, NHPC's stock has experienced a return of around 20%.

Analyzing the market environment, NHPC benefits from the increasing demand for renewable energy in India, which is further supported by government policies aimed at reducing carbon emissions and promoting energy security.

NHPC's operational efficiency, commitment to sustainability, and strategic expansions position it favorably within the Indian power sector, reinforcing its role as a key player in the renewable energy landscape.

How NHPC Limited Makes Money

NHPC Limited, a prominent player in India’s hydropower sector, generates its revenue primarily through the sale of electricity. The company operates numerous hydropower stations, with a total installed capacity of approximately 7,071 MW as of March 2023. This includes 20 operational hydropower stations distributed across different regions in India.

The revenue model of NHPC Limited is heavily influenced by its power purchase agreements (PPAs) with various state electricity boards and other entities. These agreements facilitate the sale of electricity generated at predefined rates. As of FY 2022-23, NHPC reported a total income of approximately ₹9,333 crore, showcasing a growth of 16% year-on-year.

In addition to electricity sales, NHPC also earns income through ancillary services and consultancy contracts. For the fiscal year ending March 2023, the company reported income from other sources amounting to approximately ₹980 crore.

NHPC's pricing mechanism is influenced by the Central Electricity Regulatory Commission (CERC) and is structured to ensure stability and predictability in its revenue streams. The cost-plus tariff structure implies that NHPC is reimbursed not only for the cost of generation but also for a fixed return on equity, which enhances financial viability.

The company's operational efficiency significantly impacts its profitability margins. For FY 2022-23, NHPC recorded an operating profit of approximately ₹3,350 crore, yielding an operating margin of about 36%.

Moreover, NHPC is currently investing in expanding its renewable energy portfolio. The company has plans to add an additional 3,200 MW capacity, including solar and wind projects, which is expected to diversify its revenue streams and reduce dependence on traditional hydropower.

As of the latest reporting, NHPC's return on equity (ROE) stands at approximately 8.6%, suggesting a stable but cautious growth trajectory in achieving shareholder value. The company's debt-to-equity ratio is reported at 1.2, reflecting a balanced approach to financing its growth initiatives while managing risks effectively.

In terms of market valuation, NHPC Limited's market capitalization stood at around ₹37,000 crore as of October 2023, indicating a robust investor outlook towards its growth potential, especially in the renewable energy segment.