NHPC Shares Tumble 5% as Q3 Earnings Miss, EBITDA Plunges 79%

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AuthorAarav Shah|Published at:
NHPC Shares Tumble 5% as Q3 Earnings Miss, EBITDA Plunges 79%
Overview

NHPC Ltd. reported a sharp year-on-year decline in third-quarter earnings, with EBITDA slumping 79.2% to ₹210 crore. Revenue dipped 2.9% to ₹2,220 crore. Margins contracted significantly to 9.5% from 44.4%, driven by a 3.2-fold surge in other expenses to ₹1,537 crore and increased tax burdens. The company also cancelled solar project MoUs and is set to withdraw as promoter of PTC India.

NHPC Ltd.'s third-quarter results revealed substantial financial deterioration, with earnings before interest, tax, depreciation, and amortisation (EBITDA) collapsing 79.2% to ₹210 crore. Revenue saw a modest 2.9% decline to ₹2,220 crore, failing to cushion the impact of soaring costs. The company's profitability was severely hit by a more than threefold increase in other expenses, which ballooned to ₹1,537 crore. This surge included a ₹781 crore one-off charge booked due to the early commissioning of a transmission system.

Steep Margin Contraction and Tax Burden

The dramatic rise in expenses, coupled with a substantial increase in total tax expense to ₹573.2 crore from ₹104.3 crore in the prior year, led to a severe contraction in profit margins. Margins plummeted to 9.5% from 44.4% year-on-year. Net profit declined 5.2% to ₹219 crore. The company also reported a loss before movement in regulatory deferral account balance of ₹855.5 crore, a significant reversal from the ₹296.4 crore profit in the year-ago period, with the movement in regulatory deferral account balances standing at ₹1,176 crore.

Operational Setbacks and Strategic Realignments

Adding to the concerns, NHPC cancelled its memorandum of understanding with Green Energy Development Corporation of Odisha Ltd. (GEDCOL) for floating solar power projects. Furthermore, the company is preparing to withdraw as a promoter of PTC India Ltd. Despite these challenges, NHPC's standalone power generation increased by 31% to 3.5 billion units, though profitability was impacted by issues such as the projected affected families (PAF) at the Parbati II project (59%) and ongoing repairs at the Teesta V project.

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