PSU Stock in Focus After Its Board Approves ₹5,700 Cr for Hydropower Projects in J&K

Synopsis: NHPC Ltd is in focus upon approving two J&K hydro projects: Uri-I Stage-II (240 MW, ₹2,708.95 crore) and Dulhasti Stage-II (260 MW, ₹2,993.96 crore), and the construction may start on 1 March 2026.

The shares of the Navratna PSU company, specializing in the planning, development, and execution of large-scale hydroelectric projects, are in focus as its board approves approximately Rs. 5,703 Crore for Uri-I & Dulhasti Stage-II Hydropower Projects.

With a market capitalization of Rs. 74,453.80 Crores on the Day’s Trade, the shares of NHPC Ltd rose by 1.18 percent, reaching a high of Rs. 75.31 compared to its previous close of Rs. 74.43.

What Happened

NHPC Ltd, engaged in the planning, development, and execution of large-scale hydroelectric projects, met on Friday and has approved investment proposals for two hydroelectric projects in Jammu & Kashmir.

The Uri-I Stage-II HE Project (240 MW) is estimated to cost Rs. 2,708.95 crore (including Rs. 264.31 crore for IDC and Rs. 26.20 crore for enabling infrastructure), with construction expected to start on 1st March 2026, subject to signing an implementation agreement with the UT government/JKSPDC and other approvals. 

Similarly, the Dulhasti Stage-II HE Project (260 MW) has an estimated cost of Rs. 2,993.96 crore (including Rs. 289.06 crore for IDC and Rs. 245 crore for enabling infrastructure), with construction also planned from 1st March 2026, subject to requisite agreements and approvals.

Financials & Others

The company’s revenue declined by 2.87 percent from Rs. 2,287 crores in December 2024 to Rs. 2,221 crores in December 2025. Meanwhile, Net profit declined from Rs. 330 crores to Rs. 321 crores in the same period.

The company shows a decent return on capital employed (ROCE) of 7.42 percent and a return on equity (ROE) of 7.53 percent, indicating efficient use of its capital and equity to generate profits.

Its stock is trading at a P/E of 23.6, slightly below the industry average of 25.8, suggesting it may be relatively undervalued. Additionally, the company has maintained a healthy dividend payout of 54.9%, reflecting consistent shareholder returns.

NHPC Ltd, incorporated in 1975 and headquartered in Faridabad, is a premier Miniratna Category-I Government of India enterprise under the Ministry of Power. As India’s largest hydropower developer, it specialises in planning and developing hydroelectric projects, with a growing portfolio in solar and wind energy.

The company has a proven track record with strong operational performance and robust in-house engineering capabilities. It is engaged across the entire hydro power project lifecycle, from concept to commissioning, and has a presence in 15 states and 2 union territories. 

It has an Holding of 16% share of India’s installed hydro-electric capacity (8,271 MW out of 50,915 MW). The company also operates a consultancy and power trading business, while actively exploring international opportunities. The company has installed 8833 MW capacity (8271 MW Hydro & 562 MW Renewable Energy) through 31 power stations.

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