NHPC Limited Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next
NHPC Limited (NSE:NHPC) investors will be delighted, with the company turning in some strong numbers with its latest results. Results were good overall, with revenues beating analyst predictions by 2.7% to hit ₹38b. Statutory earnings per share (EPS) came in at ₹1.09, some 9.0% above whatthe analysts had expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on NHPC after the latest results.
After the latest results, the five analysts covering NHPC are now predicting revenues of ₹181.9b in 2027. If met, this would reflect a huge 49% improvement in revenue compared to the last 12 months. Per-share earnings are expected to climb 16% to ₹4.38. Before this earnings report, the analysts had been forecasting revenues of ₹186.8b and earnings per share (EPS) of ₹4.10 in 2027. If anything, the analysts look to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.
Check out our latest analysis for NHPC
The consensus has made no major changes to the price target of ₹87.83, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. 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.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting NHPC's growth to accelerate, with the forecast 70% annualised growth to the end of 2027 ranking favourably alongside historical growth of 4.3% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 16% annually. 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. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. With that said, earnings are more important to the long-term value of the business. The consensus price target held steady at ₹87.83, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for NHPC going out to 2029, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 3 warning signs for NHPC (1 is a bit unpleasant!) that you need to be mindful of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.