Whalesbook
📉 The Financial Deep Dive
NHPC Limited announced its Q3 FY26 financial results, revealing a mixed performance. Consolidated profit for the quarter ended December 31, 2025, surged by 38.7% YoY to ₹320.60 Cr. This substantial increase was significantly bolstered by a ₹437.14 Cr gain from regulatory deferral account balances. Without this one-off benefit, the consolidated profit would have reflected a stark decline, with EPS (excluding deferrals) turning negative at ₹(0.95), down from ₹0.20 in the prior year.
Operationally, revenue from operations declined by 2.9% YoY to ₹2,220.73 Cr. Profitability metrics also weakened, with operating margins compressing to 26.38% from 33.62% YoY. On a standalone basis, revenue fell 4.7% YoY to ₹1,877.47 Cr, while profit saw a 7.0% YoY increase to ₹292.87 Cr, also aided by a substantial ₹1,137.47 Cr positive movement in regulatory deferral account balances. Standalone EPS, excluding these deferrals, was a negative ₹(0.84) compared to ₹0.25 in Q3 FY25, and operating margins dropped to 19.35% from 28.47%.
Despite the quarterly headwinds, the nine-month performance for FY26 remained positive. Standalone revenue grew 9.4% YoY to ₹7,587.01 Cr, and profit rose 4.6% YoY to ₹2,290.26 Cr. Consolidated revenue was up 9.5% YoY to ₹8,799.76 Cr, with profit increasing 24.1% YoY to ₹2,671.04 Cr.
The Board also approved an interim dividend of 14% (₹1.40 per equity share) for FY25-26.
🚩 Risks & Outlook
A key concern is the increasing financial leverage. The standalone Debt-to-Equity ratio rose to 1.05 (from 0.93 in Dec 2024), and the consolidated ratio climbed to 1.17 (from 0.96). This indicates that the company is becoming more reliant on debt financing. Furthermore, current ratios have seen a marginal decrease, signalling slight pressure on short-term liquidity.
Strategically, NHPC approved the cancellation of an MoU for floating solar projects in Odisha with GEDCOL. Additionally, it will withdraw its nominee director from PTC India Limited and relinquish its promoter status as per Ministry of Power directives.
The company successfully commissioned several projects, including the 800 MW Parbati-II, 300 MW Karnisar Solar, and units of the 2000 MW Subansiri Lower Project during the nine months. A second unit of Subansiri Lower was commissioned on February 1, 2026.
Crucially, no specific forward-looking guidance was provided by the management, leaving investors to ponder future performance trends amidst these mixed quarterly results.