NHPC FY26: Profit up, capex accelerates, hydro pipeline expands

NHPC ended FY25-26 with a familiar mix of stability and change. The stability came from its regulated hydro base and a decade-long record of steady generation. The change came from a bigger balance sheet, a sharper step-up in capital spending, and the start of a commissioning cycle that could reshape capacity over the next four to five years.

On a consolidated basis, revenue from operations rose to 11,615.29 crore in FY26 from 10,379.86 crore in FY25, an 11.90 percent increase. Total income increased 9.23 percent to 12,686.09 crore. Profit after tax moved up to 4,220.46 crore, up 23.70 percent year on year, while profit attributable to owners of the parent rose to 3,765.74 crore from 3,006.67 crore. Consolidated EBITDA for FY26 was 7,454 crore, translating into an EBITDA margin of 59 percent, with a profit margin shown at 36 percent.

But the headline profit growth sits alongside a compression in pre-tax profitability. Profit before tax after regulatory adjustment declined to 3,893.68 crore from 4,767.19 crore. This gap between PBT and PAT reflects a year where rate regulation income was meaningful at 983.36 crore for the full year, while the tax line was negative at 326.78 crore. It is a reminder that NHPC’s reported earnings can swing with regulatory deferrals and the timing of tariff and tax items, even when cash generation is anchored in long-lived assets.

Operations: hydro still anchors the story, renewables start to show up

NHPC’s operating portfolio now stands at 9,333 MW as of May 2026, spread across 31 power stations. Hydro contributes 8,771 MW across 24 stations, and renewable energy contributes 562 MW across 7 stations. The company also highlighted its geographic footprint across 15 states and 2 Union Territories.

Generation in FY26 rose to 29,600 million units on a consolidated basis, up from 25,532 million units in FY25. Hydro generation was 28,761 million units versus 25,184 million units in FY25, while solar generation rose sharply to 782 million units from 292 million units. Wind generation was largely steady at 57 million units versus 56 million units.

Within the incentives framework, FY26 consolidated incentives totalled 913.16 crore, up from 864.76 crore in FY25. Secondary energy was 569.98 crore, PAF incentives were 296.96 crore, and deviation charges were 46.22 crore. Plant performance still matters in a regulated setting. The presentation called out Omkareshwar as the station with the highest PAF at 99.50 percent. Indrasagar was highlighted for the highest deviation charges at 22 crore and for best generation at 282 percent of annual design energy.

The decade-long generation table also gives context. Total generation has moved between roughly 24,298 and 30,236 million units in the last ten years, depending on hydrology. That variability is a core feature of a hydro-heavy portfolio and shapes how investors should interpret year-to-year movements.

The cost line: higher depreciation, other expenses, and finance cost pressure

NHPC’s FY26 consolidated income statement shows why investors need to look beyond revenue growth. Total expenditure rose 37.20 percent to 9,778.25 crore. Depreciation and amortisation expense increased to 1,975.85 crore from 1,193.04 crore. Finance cost increased to 1,423.02 crore from 1,188.94 crore.

The largest step-up was in other expenses, which nearly doubled to 4,060.30 crore from 2,122.48 crore. Employee benefits expense declined to 1,498.34 crore from 1,823.60 crore. With hydro assets, the structure of expenses matters as much as the absolute number. Depreciation rises as large projects begin commercial operations and capitalised assets move from CWIP into the operating base. And finance cost trends can shift quickly when the construction pipeline is large.

The presentation also offered a simple mix view for FY26. Revenue from operations contributed 92 percent of revenue, with other income at 8 percent. On expenditure, other expenses were shown at 42 percent, depreciation 20 percent, employee benefits 15 percent, finance cost 15 percent, and generation expenses 8 percent. This mix highlights that NHPC’s cost and earnings profile is not only about water flows but also about what is under construction and what is in early operating years.

On efficiency metrics, NHPC reported profit per MW at 46 lakhs in FY26 versus 47 lakhs in FY25. Profit per employee rose to 81 lakhs from 66 lakhs. These metrics are directional indicators, not valuation drivers, but they help explain how profit can rise even when the asset base is expanding.

Balance sheet and capital cycle: debt rises as commissioning begins

The balance sheet expanded sharply. Total assets increased to 1,20,010.89 crore in FY26 from 1,02,677.71 crore in FY25. Shareholders’ funds rose to 41,437.18 crore. Long-term borrowings increased to 46,173.52 crore from 35,681.73 crore.

The asset mix changed in a way that signals the early phase of a commissioning wave. Property, plant and equipment rose to 45,775.59 crore from 17,811.84 crore, while capital work in progress declined to 34,947.58 crore from 50,600.82 crore. This shift typically reflects projects moving out of CWIP and into the operating base.

Cash and bank balances improved to 3,651.04 crore from 2,750.94 crore. Trade receivables were 2,629.40 crore, and the presentation’s debtors slide showed trade receivables at 2,630 crore as on 31.03.2026, including unbilled debtors of 1,887 crore. Receivables beyond 45 days were 242 crore, net of provision. The top five debtors included J and K at 568 crore, Uttar Pradesh at 394 crore, Rajasthan at 340 crore, Madhya Pradesh at 230 crore, and Punjab at 192 crore.

For long-duration utilities, receivables discipline is a recurring theme. The data suggests the overdue book remains contained relative to the total receivables, even though the unbilled component is high. That unbilled share can reflect timing of billing cycles and regulatory accounting but it still warrants monitoring because it affects working capital optics.

Capex is clearly in expansion mode. Consolidated capex rose to 13,689 crore in FY26 from 11,596 crore in FY25. The capex target for FY27 is 15,000 crore. This is the investment engine behind the pipeline, and it explains the parallel rise in debt.

Project execution: Subansiri and Parbati move from long wait to delivery

NHPC used FY26 to showcase execution milestones that have been watched closely. It commissioned four units of the Subansiri Lower Hydroelectric Project, 250 MW each, on 23.12.2025, 01.02.2026, 20.03.2026 and 08.05.2026. The project is described as the largest hydro power station of the country.

Parbati II, 800 MW, was fully commissioned on 15.04.2025, with three 200 MW units commissioned on 01.04.2025 and one unit on 16.04.2025. The presentation notes that Parbati II is currently the largest fully commissioned operating power station of NHPC.

On renewables, NHPC fully commissioned the 300 MW Karnisar Solar Power project in Bikaner, Rajasthan, with full capacity COD effective 16.10.2025.

These milestones matter because they reduce execution risk and convert sunk capital into regulated earning assets. They also provide a clearer view of how depreciation and finance costs may trend as more projects begin operations.

Pipeline and optionality: hydro build-out and pumped storage bets

NHPC’s pipeline is large. As per the consolidated physical snapshot, projects under construction are 9,204 MW across hydro and solar. Projects awaiting clearances and approval are 10,263 MW. Projects under survey and investigation are 19,820 MW, which includes 1,890 MW of hydro and 17,930 MW of pump storage schemes.

In hydro under construction for NHPC, the key projects include Subansiri Lower (remaining four units expected in Q4 FY26-27), Teesta VI (500 MW, expected FY29-30 Q2), Uri I Stage II (240 MW, FY29-30 Q3), Dulhasti Stage II (260 MW, FY29-30 Q3), and Dibang (2,880 MW, FY31-32 Q4). The total for these NHPC projects is 4,880 MW.

Subsidiaries add another 3,134 MW under construction, including Rangit IV (120 MW, FY26-27 Q3), Kiru (624 MW, FY26-27 Q4), Pakal Dui (1,000 MW, FY26-27 Q4), Kwar (540 MW, FY27-28 Q4), and Ratle (850 MW, FY28-29 Q3). Together, NHPC and subsidiaries have 8,014 MW under construction.

In the clearance bucket, Teesta IV (520 MW) and Dugar (500 MW) are highlighted, and Sawalkot (1,856 MW) has received forest clearance stage I, defence clearance, and environmental clearance. Subsidiary projects under clearance include Kamala (1,720 MW), Subansiri Upper (1,605 MW), Etalin (3,097 MW), and Kirthai II (820 MW). Kamala has already received investment approval from the Cabinet Committee of Economic Affairs on 08.04.2026.

The pumped storage programme provides longer-dated optionality, but also extends execution and approval complexity. The list spans multiple states and a JV in Andhra Pradesh through ANGEL, with projects like Savitri (2,400 MW), Kalu (1,800 MW), Gadikota (1,200 MW), and multiple Odisha proposals. The grand total for pump storage schemes under survey and investigation is 17,930 MW.

For investors, this pipeline is both a strength and a risk. It supports the regulated equity growth narrative. But it also needs funding, approvals, and consistent project management in regions that often have complex environmental, land, and social processes.

Investor takeaways: a regulated utility entering a heavier build phase

NHPC’s FY26 results show a company that is growing but also absorbing the cost of growth. Revenue and profit attributable to owners rose, supported by higher generation and a larger operating base. Yet total expenditure rose faster than revenue, and the balance sheet expanded sharply with higher debt.

The strategic message is clearer. NHPC is no longer only a mature hydro operator. It is also a developer in a large commissioning cycle, with a growing renewable footprint and a stated push into pump storage. Major projects like Subansiri Lower and Parbati II moving to commissioning help credibility, and the capex target for FY27 suggests momentum is expected to continue.

For investors, the near-term questions are practical. How smoothly do the remaining Subansiri units get commissioned, and how predictable is the tariff stabilisation at newer stations like Parbati II. Can the company keep receivables and cost control tight while funding a pipeline that spans hydro, solar, and storage.

The long-term payoff depends on execution. If the under-construction portfolio reaches COD close to schedule, NHPC’s regulated equity base and earnings capacity should expand. FY26 reads like the start of that transition, with higher capex, a shifting asset mix, and commissioning milestones that begin to convert years of construction into operating cash flows.