NTPC vs NHPC: Which power PSU stock deserves a spot in your portfolio after Q4 results?

PSU stocks to buy after Q4FY25 results: NTPC and NHPC — both state-owned companies in the power sector — have recently hogged the spotlight in the Indian stock market following the release of their March quarter results (Q4FY25). NTPC, the country’s largest power producer, focuses on thermal (coal-based) power, while NHPC is India’s largest hydropower generator.

Their March quarter financial and operational performance came in steady, supported by ongoing capacity additions, which boosted their bottom-line figures. 

Following the Q4 numbers, domestic brokerage firm ICICI Securities retained its 'Buy' rating on NTPC and raised its target price to ₹442 per share from the earlier ₹430.

Similarly, Axis Securities also raised its target price on NTPC stock to ₹400 per share, maintaining its 'Buy' recommendation. In contrast, Motilal Oswal retained a 'Neutral' rating with a target price of ₹383 per share.

Kotak Institutional Equities revised NTPC share price target to ₹320 from ₹305 but maintained its 'Sell' rating. Investors should note that NTPC’s current market price stands at ₹344 per share, slightly above Kotak’s revised target.

As for NHPC, ICICI Securities downgraded its rating to 'Sell' from 'Hold' due to the recent sharp run-up in NHPC's share price. The brokerage also cut its target price to ₹72 per share from the earlier ₹76. However, the brokerage remained optimistic about the company's long term growth prospects. 

Boost in power generation lifts NTPC profitability

NTPC, which released its March quarter results on Saturday, reported a nearly 22% rise in consolidated net profit to ₹7,897 crore for Q4FY25, aided by higher revenue from its power generation business. The company’s total income increased to ₹51,085 crore in Q4FY25 from ₹48,816 crore in Q4FY24. 

Rising electricity demand across the country has prompted the New Delhi-based company to ramp up capacity and reinforce its market leadership.

According to a note by Elara Capital last month, power generation in India rose by over 5% during the January–March quarter compared to the same period last year. The Central Electricity Authority projects India’s peak power demand to grow by 8% in 2025, reaching 270 gigawatts.

NTPC’s gross power generation stood at 372.825 billion units (BUs) in FY25, marking a 3.07% increase from 361.703 BUs in FY24. The company has set a target of adding 25 GW of thermal capacity, of which 16.9 GW is currently under construction.

NTPC had initially planned to commission 2.8 GW in FY25, but only 660 MW was completed, with the remaining 2.1 GW now expected to be commissioned in FY26. Additionally, the company has set an ambitious goal of achieving 60 GW of renewable energy (RE) capacity by 2032.

In FY25, NTPC Group’s total installed capacity grew by 3,972 MW to 79,930 MW, primarily driven by 3,312 MW of RE capacity, including the inorganic acquisition of Anaya.

Axis Securities said that the company's robust thermal assets provide cash flow visibility and expects the company will unlock the RE business value with its aggressive RE capacity addition targets.

"We believe NTPC is a good portfolio bet given its stable dividend yield, and a further rerating potential cannot be ruled out if the peak deficits increase in future," said the brokerage. 

Reversal of water charges drives NHPC’s Q4 profit growth

NHPC reported a 52% year-on-year (YoY) growth in its consolidated net profit to ₹919.63 crore for the March quarter. Its total revenue from operations stood at ₹2,672 crore, marking a 15% increase compared to ₹2,320.18 crore in the same quarter last year.

The profit growth was primarily driven by a reversal of water charges pertaining to Himachal Pradesh and Sikkim in the base quarter.

In its latest update on Monday, the company stated that the commissioning process for three units (250 MW each) of the Subansiri Lower Hydroelectric Project is expected to begin in June 2025, subject to clearance from the National Dam Safety Authority (NDSA). The remaining five units (also 250 MW each) are anticipated to be completed by May 2026 in a phased manner.

In April, NHPC commissioned the 800 MW Parbati-II Hydroelectric Project and 107.14 MW (out of a total planned 300 MW) of the Karnisar Solar Power Plant.

According to ICICI Securities, NHPC is estimated to add approximately 1.5 GW of renewable energy capacity by FY27. These ongoing capacity additions, as per the brokerage, are expected to drive earnings growth over the next 2–3 years.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.