Fundamental Analysis of NHPC:
- Current Market Price (CMP) is Rs. 26.80
- Face Value of NHPC is Rs. 10.
- Present Book Value of NHPC is Rs. 18.92. At the CMP, NHPC looks very attractive to buy.
- Promoter holding is 86.36 percent, FII holding is 1.60%, General Public holding is 6.75%. High promoter holding is a good sign. It's always good to have formidable cushion of promoters for the general public.
- NHPC is a value buy below Rs. 20-21 level. However, considering the book value of the stock which is on constant rise, I wouldn't mind accumulating it at present price levels.
- It will be good to bring the average cost below Rs. 25 for long term investment.
- NHPC also pays dividend. Last time it paid Rs. 0.55 dividend per share in March 2010.
Conclusion: Good stock for long term investment. My strategy would be to buy the first lot below Rs. 28. Buy another lot below Rs. 25. If the price goes below Rs. 21, buy the final lot.
Objective: Refer point # 6. However, I wouldn't want to keep all my eggs in one basket. Won't spend more than 10% of my total capital on NHPC.
INVEST AT YOUR OWN RISK
P.S.: Looks like further decline in the NHPC stock price can't be ruled out for intermediate period. NHPC will miss its capacity addition target for five years ending in March 2012 by 3,000 megawatts (MW) from the targeted 5,322 MW, its Chairman S.K. Garg said on Thursday. Reuters