NHPC Posts Q3 Mixed Results: Revenue Slips, Margins Compress, Declares Dividend

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Author Riya Kapoor | Published at:
NHPC Posts Q3 Mixed Results: Revenue Slips, Margins Compress, Declares Dividend
Overview

NHPC Limited reported a mixed third quarter for FY2025-26. Standalone revenue declined 4.71% year-on-year to ₹1,877.47 crore, with operating margins shrinking to 19.35% from 28.47%. Despite a reported loss before tax, net profit stood at ₹292.87 crore. The company declared an interim dividend of 14% (₹1.40 per share) and announced strategic exits, including cancelling an MoU with GEDCOL and relinquishing promoter status in PTC India.

📉 The Financial Deep Dive

NHPC Limited's Board of Directors convened on February 4, 2026, to review its financial performance for the quarter and nine months ended December 31, 2025.

The Numbers:

  • Standalone Performance (Q3 FY26 vs Q3 FY25):

  • Revenue from operations saw a 4.71% year-on-year decrease, falling to ₹1,877.47 crore from ₹1,970.35 crore.

  • The operating margin experienced a significant contraction, dropping to 19.35% compared to 28.47% in the prior year's corresponding quarter.

  • The company reported a loss before tax of ₹(340.39) crore. However, after accounting for total tax expenses of ₹504.21 crore, a net profit of ₹292.87 crore was posted.

  • Basic and diluted EPS stood at ₹0.29.

  • Standalone Performance (9M FY26 vs 9M FY25):

  • Revenue from operations for the nine-month period grew by 9.38% to ₹7,587.01 crore from ₹6,935.72 crore.

  • Profit before tax for the nine months was ₹1,985.58 crore, leading to a net profit of ₹2,290.26 crore.

  • The operating margin for the nine-month period was a robust 36.87%.

  • Consolidated Performance (Q3 FY26 vs Q3 FY25):

  • Revenue from operations was ₹2,220.73 crore.

  • Net profit stood at ₹320.60 crore.

  • The consolidated operating margin was 26.38%.

  • Consolidated Performance (9M FY26 vs 9M FY25):

  • Consolidated revenue reached ₹8,799.76 crore.

  • Net profit was ₹2,305.58 crore.

  • The consolidated operating margin was 41.37%.

The Quality:

The substantial compression in standalone Q3 operating margins to 19.35% from 28.47% YoY was a key detractor, partially attributable to Associated Transmission System (ATS) charges for the Subansiri Lower Project, amounting to ₹781.45 crore, recognized during the quarter. While the nine-month standalone performance shows healthy growth, the quarterly dip warrants close monitoring. The company's ability to post a net profit despite a reported loss before tax in standalone Q3, due to significant tax expenses, indicates potential complexities in tax accounting or prior period adjustments.

Strategic Moves & The Forward View:

In a notable announcement, the Board approved an interim dividend of 14% (₹1.40 per equity share) for FY2025-26, signalling a commitment to shareholder returns. Strategically, NHPC decided to cancel the Memorandum of Understanding (MoU) and Promoters’ Agreement with Green Energy Development Corporation of Odisha Limited (GEDCOL) for joint floating solar power projects in Odisha. Furthermore, following a Ministry of Power directive, NHPC will withdraw its nominee director from PTC India Limited and cease its promoter status there. These moves suggest a potential re-evaluation of strategic partnerships and investment focus. The commissioning of new projects, including 800 MW Parbati-II and a unit of Subansiri Lower, is a positive for future revenue streams. The ongoing merger with subsidiary Jalpower Corporation Limited (JPCL) is also progressing.

Risks & Outlook:

Key risks include execution timelines for new projects, evolving regulatory tariffs under CERC regulations (2024-29), and the impact of the strategic exits on future growth avenues. Investors will be watching NHPC's ability to leverage its operational capacity and navigate regulatory landscapes. The management's clarity on future project pipelines and strategic direction post-partner exits will be crucial.

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