First off, thank you for the detailed post. It still resonated with me 8 years since the original post. I have been exploring certain PSUs in this light. Would it be possible to give us an update on your learnings and changes in thought process, if any?
Back in Aug 2012, NHPC was at approx Rs 18. Today at Rs 21.9 implies CAGR of 2.25%. To beat FD returns, the div yield every year should be at least 3.25% (assuming FD interest of today = 5.5% while earlier FD interest was also 9% when div yield to beat FD should be at least 6.75%, which it is today).
So, seems approximately it has not beaten FD but almost equal to FD returns. Trick seems that when FD returns were high, its div yield was low and vice versa. So maybe these PSUs are fine during a low interest yield cycle and should be sold during as interest rates increase…provided the business dynamics remain constant like say in utilities (In India even the boring utilities keep having dynamic business environment changes though)…otherwise there are lots of other risks in these PSUs to even try this for purpose of beating FD.
Is NHPC a 100% renewable energy company? What about SJVN?
Anyone still tracking or invested in NHPC? Some near term positive triggers on horizon - commissioning of Parbati II (upto 800 MW, expected Mar’23) and Subansiri Lower (upto 2000 MW, expected in FY24). Share price is also showing a lot of strength in this volatile market.