NHPC Ltd — Q3 FY26 earnings call

Call held 6 Feb 2026

Management summary

NHPC reported strong 9M FY26 results with double-digit growth in generation, revenue, and PAT, driven by new capacity additions. The company is aggressively expanding its hydro, solar, and pumped storage portfolio with substantial Capex plans. While Q3 revenue saw a slight dip due to prior-year one-offs and PAF was lower, management remains confident in project execution, tariff approvals, and future growth despite PPA signing challenges in the solar segment.

Highlights

  • Power generation for 9M FY26 increased by 15% to 25,849 MUs, primarily due to commissioning of Parbati-II (800 MW) and increased generation from Parbati-III.

  • Revenue from Operations for 9M FY26 grew 10% to Rs. 8,800 Crore, and PAT increased 7% to Rs. 2,306 Crore.

  • Successfully commissioned two units of Subansiri Lower Project (500 MW) and the 300 MW Karnisar Solar Project, NHPC's largest operational solar project.

  • Significant project pipeline with 5-6 new hydro projects totaling ~10,000 MW and ~2,000 MW of Pumped Storage Plants planned to start construction in 2026.

  • Management expressed confidence in CERC approving full tariffs for new projects, despite conservative 80% revenue recognition initially.

Concerns

  • Plant Availability Factor (PAF) for 9M FY26 was 79.27%, 3% lower than the previous period, mainly due to monsoon shutdowns at multiple power stations.

  • Q3 FY26 Revenue from Operations decreased by 3% to Rs. 2,221 Crore, primarily due to a high base effect from one-off revenue of Rs. 500 Crore in the prior year related to pay anomalies and arbitration interest.

  • Geological issues in the Head Race Tunnel of Teesta-VI project are causing slight delays, though commissioning is still targeted for 2029.

  • Challenges in signing Power Purchase Agreements (PPAs) for solar projects due to grid connectivity issues (available 2029-30) and DISCOM preference for 24-hour RTC or hybrid power solutions.

Key financials

2 periods

Q3 FY26

  • Revenue from Operations
    ₹2,221 Cr
    YoY -3%

9M

  • FY26 Power Generation
    25,849 MUs
    YoY +15%
  • FY26 Revenue from Operations
    ₹8,800 Cr
    YoY +10%
  • FY26 PAT
    ₹2,306 Cr
    YoY +7%
  • FY26 Plant Availability Factor
    79.3%
    YoY -3%
  • FY26 CAPEX
    ₹8,844 Cr
    YoY +19.4%

What they filed

Q1 FY27: revenue up 18.5%, net profit up 4.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue3,052 2,287 2,347 3,214 3,365 +10%2,221 −3%2,816 +20%3,808 +18%
EBITDA1,805 1,015 1,205 1,802 2,027 +12%212 −79%637 −47%2,352 +31%
Net profit1,060 330 920 1,131 1,219 +15%321 −3%1,549 +68%1,178 +4%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Order book

high confidence

Total value

16,690 MW

as of 2025-12-31 inferred

Execution

Various projects under construction or planned for start in 2026-2029

Composition

Mix 3 products
  • New Hydro Projects (planned to start) 59.9%
  • Solar Capacity (under construction) 7.1%
  • Pumped Storage Plants (potential) 33%

Share of order book by product

Pipeline

deal pipeline tcv

Pipeline of new hydro projects, solar under construction, and PSPs planned to start construction.

NHPC has a robust pipeline of hydro, solar, and pumped storage projects under construction or planned for near-term start, totaling over 16 GW, reflecting a strong focus on clean and renewable energy expansion.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹13,300 Cr
    • Hydro projects
    • Solar projects
    • Pumped Storage Plants
    The CAPEX plan for the current fiscal year is Rs. 13,300 Crore and next year, we are planning to spend Rs. 15,000 Crore. Thereafter, on an average, our annual CAPEX will be in the range of Rs. 12,000 to 13,000 Crore.
  • M&A Teesta-VI Acquisition · Integrated

    Taken over from NCLT

    Now, regarding Teesta-VI, which we took over from NCLT, is also going well.
  • M&A Etalin Hydroelectric Project Acquisition · Announced

    Assigned from SJVN by Power Ministry due to NHPC's capability and presence in Dibang Basin.

    Will be on NHPC's balance sheet; SJVN to be reimbursed for incurred expenditure, mainly land procurement.

    You have been assigned the project from SJVN by the Power Ministry. So, just wanted to ask you whether this project will come in your balance sheet or it will remain in the SJVN's balance sheet, what is the understanding now? / No, now this will be in the balance sheet of NHPC only.

Guidance & targets

Capex

  • FY26 Capex Plan Capex · FY26 · High confidence Rs. 13,300 Crore
    The CAPEX plan for the current fiscal year is Rs. 13,300 Crore

    — Saroj Kumar Roy

  • FY27 Capex Plan Capex · FY27 · High confidence Rs. 15,000 Crore
    next year, we are planning to spend Rs. 15,000 Crore.

    — Saroj Kumar Roy

  • Annual Capex (post FY27) Capex · Annually thereafter · High confidence Rs. 12,000 to 13,000 Crore
    Thereafter, on an average, our annual CAPEX will be in the range of Rs. 12,000 to 13,000 Crore.

    — Saroj Kumar Roy

Capacity

  • FY26 Capacity Addition Capacity · By end of March'26 · High confidence 2100 MW
    by the end of March'26, we are going to add additional capacity of 2100 MW.

    — Saroj Kumar Roy

  • FY27 Hydro Capacity Addition Capacity · FY27 · High confidence 2744 MW
    Next year, our capacity addition will be 2744 MW from hydro.

    — Saroj Kumar Roy

  • Solar Capacity Addition Capacity · By end of next financial year (FY27) · High confidence Most of 1,190 MW
    most of the solar capacity, we are planning to add by end of next financial year.

    — Saroj Kumar Roy

  • New Hydro Projects Start Capacity · During 2026 (some Q1 FY27, others Q2/Q3 FY27) · High confidence 5-6 projects, ~10,000 MW
    we are planning to start 5-6 projects this year itself, comprising around 10,000 MW of capacity.

    — Bhupender Gupta

  • Total Solar Power Commissioning Capacity · This calendar year (2026) · High confidence >1000 MW
    during this calendar year alone, we will be commissioning more than 1000 MW of solar power

    — Bhupender Gupta

  • Pumped Storage Plants (PSPs) Construction Start Capacity · This calendar year (2026) · High confidence At least two projects (~2000 MW or more)
    We are planning to start construction of at least two projects during this calendar year, which will add around 2000 MW or more, comprising 2–3 PSPs.

    — Bhupender Gupta

Project Timeline

  • Parbati-II Final Tariff Order Project Timeline · Within 5-6 months · High confidence Within 5 to 6 months
    For Parbati-II, we are expecting within 5 to 6 months.

    — Saroj Kumar Roy

  • Dibang Dam Tender Award Project Timeline · This month (February 2026) · High confidence Contract awarded
    Today only, we opened the price bid and we are going to award this contract within this month only.

    — Bhupender Gupta

  • Kamala (Middle Subansiri) Construction Start Project Timeline · May onwards · High confidence Construction start
    from May onwards, the construction may get start in the Kamala Project.

    — Bhupender Gupta

  • Etalin Construction Start Project Timeline · July or August (2026) · High confidence Start construction
    We will start the construction of Etalin from July or August.

    — Bhupender Gupta

PPA Signing

  • Solar PPA Signing PPA Signing · Next 2-3 months · Medium confidence 2,000 to 3,000 MW
    I am still hopeful that in next 2 to 3 months, we may sign PPA of around 2,000 to 3,000 MW also.

    — Bhupender Gupta

What to watch in Q4 FY26

Subansiri Lower Project commissioning

By end of March'26 (Q4 FY26)
Current Two units commissioned, third this week, fourth by March'26
Target Fourth unit commissioned

Why it matters

Successful commissioning of the fourth unit is a key milestone for this large hydro project, directly contributing to capacity and revenue.

we will commission fourth unit and declare the COD by the end of March'26.

Risks & concerns

  • Lower Plant Availability Factor (PAF)

    medium

    9M FY26 PAF at 79.27%, 3% lower YoY due to monsoon shutdowns at Dulhasti, Salal, Chamera-I and Chamera-III, though management is hopeful for recovery.

    Management acknowledged

  • Geological issues in Teesta-VI Head Race Tunnel

    medium

    Geological issues are causing slight delays in Teesta-VI, but management is handling it methodologically and remains confident of 2029 commissioning.

    Management acknowledged

  • Deferred revenue recognition for new projects pending CERC final tariff orders

    medium

    20% of estimated revenue from Parbati-II and Subansiri is not recognized until CERC's final tariff order, impacting reported profit, though management is confident of eventual approval.

    Analyst acknowledged

  • Challenges in signing PPAs for solar projects

    medium

    Hindrances include grid connectivity issues (available 2029-30) and DISCOM preference for 24-hour RTC or hybrid power, making standalone solar PPAs harder to secure.

    Management acknowledged

Q&A highlights

7 direct
Revenue decline in Q3 FY26 despite generation increase Direct
during Q3 of the corresponding period, we had a one-off revenue to the extent of Rs. 500 Crore, on account of pay anomalies and interest on arbitration. So, if you exclude Rs. 500 Crore from the previous year, then you will find that our Revenue is higher than the corresponding period.

Clarifies that the Q3 revenue dip was due to a high base effect from one-off items in the prior year, not an underlying operational issue, providing context for the reported numbers.

Asked by Ragini Pandey

Conservative revenue accounting for new projects (Parbati-II, Subansiri) Direct
we have been accounting 80% of that as revenue in our Q1, Q2 and Q3 accounts... So, almost Rs. 225 Crore has not been considered as revenue and that will be accounted after the tariff notification by CERC.

Highlights NHPC's conservative accounting practice of deferring 20% of estimated revenue from new projects until final CERC tariff orders, which temporarily understates reported profit.

Asked by Murtuza Arsiwalla

Timeline for CERC final tariff orders for Parbati-II and Subansiri Direct
For Parbati-II, we are expecting within 5 to 6 months... For Subansiri, we are going to file tariff petition by first week of March. So, interim tariff will be expecting very soon, maybe within 2 months.

Provides crucial timelines for regulatory approvals that will enable full revenue recognition and better reflect the profitability of these significant new projects.

Asked by Murtuza Arsiwalla

Likelihood of CERC approving the Rs. 7.50/unit levelized tariff for Subansiri Lower Direct
CERC goes as per CERC regulations and in the regulations, it is clearly defined that whenever any expenditure has been incurred, which is beyond the control of the company, in that case, it is allowed by the regulator... So, in all probability, CERC is going to allow that.

Addresses analyst concerns about the high tariff for Subansiri and reinforces management's confidence in CERC's approval, citing regulatory provisions for cost overruns beyond company control.

Asked by Prashant Kshirsagar

Status of the pending dam tender for Dibang Hydroelectric Project Direct
Dam tender is pending but just want to share a good news. Today only, we opened the price bid and we are going to award this contract within this month only.

Indicates a significant breakthrough in the contracting process for a critical component of India's largest hydro project, signaling accelerated execution.

Asked by Prashant Kshirsagar

Geological challenges in new projects (Upper/Middle Subansiri, Etalin, Dibang) compared to Lower Subansiri Direct
Terrain is definitely very good there and better than Lower Subansiri. So, we don't expect much of issue which we faced in Lower Subansiri because the geological conditions are much better in these projects including Etalin also.

Reassures investors by confirming that geological risks, which caused significant delays in past projects, are expected to be lower for the company's upcoming large-scale hydro projects.

Asked by Prashant Kshirsagar

Challenges in signing PPAs for solar projects Direct
Majorly 2-3 hindrances are there for PPAs. One is the connectivity issue, because connectivity which are now available are coming in 2029-30... DISCOMs want solar with battery or some other alternative like solar plus wind plus battery, because they want now 24-hour round the clock (RTC) supply or they want assured peak.

Highlights key structural challenges in the renewable energy PPA market, including grid infrastructure delays and evolving DISCOM preferences for hybrid/RTC power, which could impact future solar capacity monetization.

Asked by Rupesh Sankhe

3 min read 6 chapters

Detailed narrative

Strong 9M FY26 Performance Driven by Capacity Additions

NHPC reported a robust 9M FY26, with power generation increasing by 15% to 25,849 MUs and revenue from operations growing 10% to Rs. 8,800 Crore. Profit After Tax (PAT) also saw a 7% rise to Rs. 2,306 Crore. This growth was primarily attributed to the commissioning of the 800 MW Parbati-II Power Station and increased generation from Parbati-III, alongside the recent commissioning of two units (500 MW) of the 2000 MW Subansiri Lower Project and the 300 MW Karnisar Solar Project.

Aggressive Capacity Expansion Across Hydro, Solar, and PSPs

The company is pursuing an ambitious growth strategy, planning to add 2100 MW of capacity by March 2026 and another 2744 MW from hydro in FY27. Beyond this, NHPC aims to start 5-6 new hydro projects totaling approximately 10,000 MW in 2026 and commission over 1000 MW of solar power within the current calendar year. Additionally, it plans to commence construction on at least two Pumped Storage Plants (PSPs) with a combined capacity of over 2000 MW in 2026, targeting a generation cost of Rs. 4.50/unit and total cost of Rs. 7.00/unit for PSPs.

Significant Capex Outlays for Future Growth

NHPC's capital expenditure for 9M FY26 stood at Rs. 8,844 Crore, a 19.4% increase YoY. The company has outlined a Capex plan of Rs. 13,300 Crore for FY26, which is set to increase to Rs. 15,000 Crore in FY27. Thereafter, annual Capex is projected to be in the range of Rs. 12,000-13,000 Crore, underscoring the substantial investment required for its extensive project pipeline across hydro, solar, and pumped storage technologies.

Conservative Revenue Recognition for New Projects

For newly commissioned projects like Parbati-II and Subansiri Lower, NHPC is conservatively recognizing only 80% of the estimated revenue until the Central Electricity Regulatory Commission (CERC) issues its final tariff order. This practice resulted in approximately Rs. 225 Crore of revenue from Parbati-II not being recognized in 9M FY26. Management expressed confidence that CERC would approve the full tariff, including cost overruns beyond the company's control, with the final order for Parbati-II expected within 5-6 months.

Challenges in Solar PPA Signing and Evolving Market Dynamics

While NHPC is expanding its solar portfolio, management highlighted difficulties in signing Power Purchase Agreements (PPAs) for new solar projects. Key hindrances include grid connectivity issues, with infrastructure often available only by 2029-30, and a shift in DISCOM preferences towards 24-hour Round-The-Clock (RTC) or hybrid power solutions (solar with battery, or solar-wind-battery) rather than standalone solar. Despite these challenges, NHPC is hopeful of signing PPAs for 2,000-3,000 MW of solar capacity in the next 2-3 months.

Project Execution Progress and Favorable Geological Outlook

Major projects are progressing, with the dam tender for the 2880 MW Dibang Hydroelectric Project expected to be awarded in February 2026. The 849 MW Teesta-VI project, acquired through NCLT, has achieved 71% physical progress despite geological issues in its Head Race Tunnel, targeting 2029 commissioning. Management reassured that geological conditions for upcoming large projects like Upper/Middle Subansiri and Etalin are significantly better than those encountered in Lower Subansiri, reducing the risk of similar delays.

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