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Earnings Beat: NHPC Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models
NHPC Limited (NSE:NHPC) just released its latest quarterly results and things are looking bullish. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 11% higher than the analysts had forecast, at ₹45b, while EPS were ₹1.54 beating analyst models by 54%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the consensus forecast from NHPC's six analysts is for revenues of ₹186.5b in 2027. This reflects a sizeable 40% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 6.9% to ₹4.60. Before this earnings report, the analysts had been forecasting revenues of ₹173.2b and earnings per share (EPS) of ₹4.20 in 2027. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
See our latest analysis for NHPC
Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of ₹86.00, suggesting that the forecast performance does not have a long term impact on the company's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic NHPC analyst has a price target of ₹117 per share, while the most pessimistic values it at ₹72.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting NHPC's growth to accelerate, with the forecast 96% annualised growth to the end of 2027 ranking favourably alongside historical growth of 5.2% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 16% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect NHPC to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around NHPC's earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for NHPC going out to 2029, and you can see them free on our platform here.
Before you take the next step you should know about the 3 warning signs for NHPC (1 doesn't sit too well with us!) that we have uncovered.
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