Why is Dalal Street so happy in these dark times? While the economy is not looking good, what with the whole pandemic situation, stocks on Dalal Street have been soaring during the last week or so. With the so called holiday season over (stock markets have been shut half the number of days in the last two weeks), traders and large investors have been buying stocks with a vengeance. Probably investors have already baked in all the bad news in their estimate of where stock prices go from here. It is also a fact that when prices rise, investors feel compelled to get in the buy mode before they miss the rally. It is difficult to see where the markets are headed, but traders are quite bullish in the short term and expect Nifty to climb higher levels in the next few weeks. But investors should take investment advice from their financial advisers before purchasing any stock in these volatile times. Power and energy stocks have not moved up in the last 2-3 weeks and we feel that NHPC Ltd is a good stock to add in the buying list for smart gains. The company was incorporated 45 years ago as a Central Government Enterprise for development of hydropower in the country. Since then, NHPC has become the largest central utility for hydro power development in India. The company with a Mini Ratna status is mandated to plan, promote and organise an integrated and efficient development of power in all aspects through conventional and non-conventional sources in India and abroad. The company had been assigned difficult and almost abandoned projects i.e. 180 MW Baira Siul in HP, 105 MW Loktak in Manipur and 345 MW Salal-I in J&K from the erstwhile Central Hydroelectric Project Control Board. With the commissioning of Baira Siul in 1981, Loktak in 1983 and Salal-I in 1987, NHPC has established its strong position in the hydro power sector of the country. The company’s total installed capacity has reached 7071.2 MW from 24 projects including JV, solar and wind at present. During the financial year 2019-2020, NHPC power stations achieved a generation of 26,121 MU. Presently, NHPC is engaged in the construction of six projects aggregating to a total installed capacity of 4934 MW, including 500 MW (Teesta-VI HE Project), 1000 MW (Pakal Dul HE Project) and 624 MW (Kiru HE Project) and a 10 MW Floating Solar power Project in Kerala. In addition, 13 projects with an aggregate capacity of 8211 MW are under clearance stage which includes seven schemes of NHPC’s own, four in JV mode, one wind project and one solar project. Further, two projects with an aggregate capacity of 1079 MW are in S&I stage. The NHPC share is quoting at Rs 22 on the Indian stock exchange and can deliver a 50% price appreciation in the next one year time frame on the back of many project completions. Many mutual fund managers and high net worth individuals are accumulating the NHPC stock for including it in their portfolio for superior gains.
Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.