SJVN is one for dividend pickers. A dividend yield of 4 per cent for a company that does not carry a lot of debt and one that has grown its earnings at 15 per cent annually in the last three years is remarkable, especially when you take into consideration that SJVN is a mini-ratna PSU.

Satluj Jal Vidyut Nigam Ltd (SJVN) is a JV between the government of India and that of Himachal Pradesh. SJVN is primarily a hydroelectric power company. It operates hydroelectric projects in Himachal Pradesh, Uttrakhand, Arunachal Pradesh and in Nepal and Bhutan. The company has not restricted itself to hydroelectric power alone. It has a thermal power project in Bihar, wind power project in Maharashtra and solar power projects in Gujarat and Rajasthan. In spite of its foray into other forms of power generation, hydroelectricity is expected to continue to dominate SJVN's revenue streams in the near future.

The company beat its FY15 target of 7,920 million units by producing 8,130 million units in the financial year. It has set a generation target of 8,520 million units in FY16. This is a 5 per cent growth in number of units produced. It also plans to implement the 1,320 MW Buxar thermal power plant in Bihar as well as the 80 MW hydropower project in Arunachal Pradesh. Ongoing capacity additions will see the company add 5000 MW in the coming years.

SJVN is on a major capacity expansion spree. It guided ₹910 crore to be spent in FY16. The Buxar thermal plant is expected to get the lion's share of ₹400 crore, followed by the Rampur plant at ₹250 crore. Another ₹45 crore would be invested in the solar power plant.

What is under shadow is the status of the ₹7,000 crore hydroelectric project that the company had signed with the Nepal government late last year. SJVN had signed an agreement to build a 900 MW plant in Nepal that was expected to go live in seven-eight years. In the aftermath of the earthquake, there has been no update from the company about the project.

With SJVN, you get surety of dividend payout. According to prevailing directions, all profit-making central PSU's are required to declare a payout of 20 per cent of their net profit as dividend. The stock with a book value of ₹22.18 trades at ₹24 per share. The trailing twelve-month earnings per share is ₹3.96 trades. The P/E is a reasonable figure of six.