NHPC Ltd Faces Financial Challenges Amidst Flat Performance and High Leverage Concerns

NHPC Ltd, a prominent player in the power industry, has recently undergone an evaluation adjustment reflecting its current market standing. The company has reported flat financial performance for the quarter ending March 2025, with key metrics indicating challenges in growth and profitability. Over the past five years, NHPC's net sales have shown an annual growth rate of just 0.73%, while operating profit has increased at a rate of 2.20%.
The company's ability to service its debt is a concern, highlighted by a Debt to EBITDA ratio of 5.02 times, which suggests significant leverage. Additionally, NHPC's average Return on Equity (ROE) stands at 9.57%, indicating limited profitability relative to shareholders' funds. The Return on Capital Employed (ROCE) has also reached a low of 7.17%, further emphasizing the company's financial constraints.

Despite these challenges, NHPC has maintained a high level of institutional holdings at 21.08%, with an increase of 0.53% in stake over the previous quarter. This suggests that institutional investors continue to monitor the company's fundamentals closely.

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