At Rs 86/share, PSU stock set to gain amid rising India-Pakistan tensions? Brokerage target suggests 111% potential gain

PSU stock to buy: Tension between India and Pakistan has risen after the Pahalgam attack. India has suspended the Indus Water Treaty. Under this treaty, India had rights over three eastern rivers of the Indus water system, while Pakistan controlled the water from the three western rivers. This water is also used for hydro power generation. According to a report by Ventura Securities, hydroelectric projects in Jammu & Kashmir that were on hold may now resume and could be completed ahead of schedule.

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NHPC is working on 5 Major Hydropower Projects in Jammu & Kashmir

NHPC is India’s leading government-owned hydro power company. It is currently developing five hydro power projects in Jammu & Kashmir. These include the 800 MW Bursar project, 260 MW Dulhasti project, 1856 MW Sawalkot project, 240 MW Uri project, and the 930 MW Kiru hydro project. Together, these five projects have a total capacity of 4086 MW. NHPC is developing all five projects. The Kiru project is a joint venture with the Jammu & Kashmir government, with a 51:49 ownership split, while NHPC has 100 per cent ownership in the other four projects.

Suspension of Indus Water Treaty to Benefit NHPC and Hydropower Projects

Analysts believe that due to the suspension of the Indus Water Treaty, NHPC may be able to complete its ongoing projects two years ahead of schedule. As a result, the company’s power generation capacity is expected to increase from 7 GW to 12 GW by FY28.

As of December 31, 2024, NHPC’s installed capacity is 7,233 MW, about 10 per cent of India’s total installed capacity of 46,968 MW. NHPC currently operates 28 power stations. It has hydro and solar projects of 10,804 MW under construction, 4,112 MW worth of projects awaiting clearance, and 4,215 MW in the survey and investigation stage. Overall, the company’s future outlook looks strong.

NHPC Share Price Target

NHPC’s stock is currently trading at around Rs 86, with a market cap slightly above Rs 86,000 crore. A brokerage firm has given a target price of Rs 184 for the next 18–24 months, which suggests a potential upside of 111 per cent. The stock’s 52-week high is Rs 118, recorded in July 2024, while the 52-week low was Rs 71 in February this year.

In another report, the brokerage advised buying the stock if it crosses Rs 91 on a technical basis. The short-term target is Rs 100, and the medium-term target is Rs 118. The stock has strong support at Rs 74, which can be used as a stop-loss level.

DISCLAIMER: Not financial advice; invest at your own risk