NHPC FY 2025-26: Commissioning-led growth, tariff timing, and a heavier cost base

NHPC’s FY 2025-26 results reflect a year where operational momentum improved, even as the cost base expanded sharply and regulatory timing remained a key variable. On a consolidated basis, revenue from operations rose to 11,615.29 crore in FY 26 from 10,379.86 crore in FY 25, an 11.90 percent increase. Total income stood at 12,686.09 crore.

Profitability on a reported basis also improved. Profit after tax attributable to the owners of the parent came in at 3,765.74 crore for FY 26 versus 3,006.67 crore in FY 25. In the earnings call, management also highlighted that tax expense for FY 26 was impacted by deferred tax adjustments and recognition of MAT credit, which affected comparability.

Operationally, the year benefited from new commissioning and incremental capacity contribution. Management stated consolidated generation for FY 26 at 29,619 million units versus 25,548 million units in FY 25, up around 16 percent. The driver list was clear: commissioning of Parbati II, partial commissioning of Subansiri Lower, commissioning of the Karnisar solar power station, increased generation at some stations including Uri I, and higher generation at NHDC.

Operations: more generation, but plant availability slipped

While generation improved, the plant availability factor moved in the opposite direction. Management reported a FY 26 PAF of 74.75 percent versus 78.87 percent in FY 25. The concall attributed the decline to shutdowns for works such as MIV repair, sill beam restoration, and radial gate repairs at stations including Dulhasti, Chamera III and TLDP IV.

The investor presentation also underlined the scale of NHPC’s operating portfolio. As of May 2026, consolidated installed capacity was stated as 9,333 MW across 31 power stations, comprising 8,771 MW of hydro and 562 MW of renewable energy.

Financial summary (consolidated)

Costs: depreciation, finance cost, and other expenses expanded

The most important earnings feature of FY 26 was the surge in expenditure. Total expenditure increased to 9,778.25 crore from 7,127.22 crore.

Management explained that finance costs rose to 1,423.02 crore from 1,188.94 crore, mainly because interest on bonds and term loans for Parbati II, Subansiri Lower and Karnisar solar started getting charged to the profit and loss account after commissioning. Depreciation and amortisation increased to 1,975.85 crore from 1,193.04 crore, again linked to newly commissioned power stations.

Other expenses nearly doubled, rising to 4,060.30 crore from 2,122.48 crore. Management cited drivers such as higher general network access charges, insurance expense, losses out of insurance claims, provisions, and repair and maintenance.

On the balance sheet, long term borrowings increased to 46,173.52 crore as on 31 March 2026 from 35,681.73 crore a year earlier, while cash and bank balances were 3,651.04 crore.

Projects: Subansiri Lower, Parbati II, and the larger pipeline

NHPC’s FY 26 was also a milestone year for commissioning. Management highlighted commissioning of four units of Subansiri Lower (250 MW each). The concall guided that the remaining four units are expected to be commissioned one by one till March 2027.

Parbati II (800 MW) was stated as fully commissioned on 15 April 2025. The investor deck also notes Karnisar Solar (300 MW) achieved COD for full capacity with effect from 16 October 2025.

The larger construction pipeline remains substantial. The investor presentation lists hydro projects under construction including Subansiri Lower (remaining units), Teesta VI (500 MW), Uri I Stage II (240 MW), Dulhasti Stage II (260 MW), and Dibang (2,880 MW). Management further discussed subsidiary projects under construction such as Rangit IV (120 MW), Kiru (624 MW), Pakal Dul (1,000 MW), Kwar (540 MW) and Ratle (850 MW), with project-wise progress updates in the call.

Solar build-out and storage

On solar, NHPC listed 1,190 MW of solar projects under construction, with commissioning timelines ranging from June 2026 to March 2027 for projects across Andhra Pradesh, Gujarat (including Khavda), Odisha, and Kerala (floating solar). In addition, NHPC disclosed its role as an intermediary procurer with large solar and FDRE capacities under PPA and PSA processes.

The deck also outlined two battery energy storage projects where NHPC is the bid inviting agency, totaling 1,500 MWh, with targeted completion dates of October 2026 and January 2027.

Tariffs, under-recovery, and what investors should watch

A recurring discussion point in the concall was tariff progress for newly commissioned large assets. Management stated that Parbati II billing has started at 75 percent of filed tariff based on an interim tariff order. For Subansiri Lower, management said billing would start after the interim tariff notification from CERC.

Management also quantified under-recovery under the conservative revenue booking approach. They indicated that, versus the filed tariff expectations, Parbati II had an under-recovery of about 300 crore and Subansiri Lower had about 150 crore of under-recovery for the three units considered at the time of discussion.

Another watch item is Teesta V. Management stated there was no revenue contribution in FY 26, only expenditure, and indicated that restoration work was underway with generation expected to resume from June 2026.

Closing takeaways

NHPC’s FY 26 reflects a transition phase. The company is moving into a period where commissioning of large assets lifts generation and revenue, but the P&L also begins to absorb interest and depreciation that were earlier capitalised during construction. The near-term swing factors remain tariff finalisation for Parbati II, interim tariff progression for Subansiri Lower, and the resumption of Teesta V.

On the medium-term horizon, the scale of the hydro and renewables pipeline, along with pumped storage initiatives listed in the deck, sets the direction. The execution and regulatory cadence will determine how smoothly this capex cycle translates into stable regulated earnings.