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Is Hydropower on Bubble just waiting to burst or I don’t see the future?

I see hydro’s which have not even started production, are in negative reserves, and not a single penny loan paid are currently trading above 400. Some hydro like Hurja, GLH, UPCL that are trading above 400 seems way too overvalued. Are people buying only thinking that they will issue right shares, which will lead to further increase in prices or is it FOMO kicking in?

A hydro can generate revenue of 3-4 crore per MW (as per Chilime, SHPC, BPCL financials) with most efficient utilization. Construction of per MW hydro is from 20 crore to 30 crore per MW depending on project. With no expense, these hydro can make gross earning margin of 15 to 20% (3 crore/20 crore). With operational expenses, the earning will decrease further. And hydro earning cannot grow by 40-70% like banks, insurance on year to year basis due to fixed production capacity and fixed rate.

There are many hydros which does not make even half of that, for e.g. National Hydro made revenue of 5.5 crore and net profit of 1 crore in last FY 76/77. National hydro is 7.5mw project. Its stock is trading at 370 for EPS of Rs. 0.76, this is PE of 486 times.



r/NepalStock by kornholic

10 Comments
  1. Pro_wolf69 says

    Maile jhan paila nei barun ko 500 …rs 300 below huda leko aile price tah dherei overvalued lagiraxa…
    Exit point kati mah hola?

  2. [deleted] says

    [deleted]

  3. [deleted] says

    Kamaune falne ho. More right shares coming into hydro.

  4. 0penT says

    Actually when hydropower scripts were all available below 100 rs I used to think the same. But i anyhow entered the market via those because there were no other scripts were available at that price and I wanted to minimize risk as much possible. Situation is almost similar now any other scripts with good fundamentals and low risks have gone up and available for new entrants are only hydro scripts. And meanwhile experienced players are playing with new investors via those scripts. Hope everything goes fine.

  5. SuspiciousTrash0 says

    the weird thing about the bubble is you never know if it is a bubble. but like everybody, i think it’s a bubble which is set to burst.

    sold hurja, nhpc, akpl and hdhpc today at whoopping profit of 40 to 100 percentage. 🎊

  6. asmr10 says

    Jasari upper circuit lauda kinchu bhanda ni paidaina testai jati ma bhaye ni sell garchu bhanda ni buyer napaune din aauna sakcha. Don’t think you are the only smartest person who is into hydro for short term. Once sentiment becomes negative things will go back to normal where it belongs.

  7. y4maa says

    ride while you can

  8. berojgar_keto says

    No one is buying hydros right now for the long term….its all about short term trading… i personally have made an almost 200% return on my hydro shares in the last few months…

    the bubble was supposed to burst a month back yet its still going strong

  9. [deleted] says

    if you are disciplined enough to trade, then hydros are good opportunity imo. dont buy without being technically perfect, follow stop loss which most important in trading. else if you’re looking for long term investment, hydro are not anyone’s choice. go for micro and banks! so a “bubble” infact could be an opportunity if you can see through.

  10. aadarsha2056 says

    Of course it is heading towards big bubble which will make promoters filthy rich and wipe out entire capital of new traders(gamblers) who are buying stocks without any idea of valuation.

    I regret not buying these hydro when they were below 100rs. This is my first bull market so i made this mistake of not anticipating how easily operators can play with small cap hydro in a bull market. 1.5 yrs ago people used to say ” pani le kharani banaucha dont touch hydro” now everyone is yoloing their money on hydro.

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