NHPC Q1 FY27: Profit holds up as costs rise and capacity build accelerates

NHPC entered FY27 with a familiar mix for a hydro-led utility: strong generation-led revenue growth, stable profitability, and sharper pressure from finance and depreciation costs as the project pipeline expands. In Q1 FY27, consolidated revenue from operations rose to 3,808.31 crore from 3,213.77 crore in Q1 FY26, an 18.50 percent increase. Total income grew 15.02 percent to 3,959.72 crore. Profit after tax climbed 4.15 percent to 1,178.09 crore, while profit attributable to owners of the parent stood at 1,095.87 crore, up 2.90 percent.

The headline looks steady, but the underlying shape of the quarter matters more. Total expenditure rose faster than income, increasing 26.21 percent to 2,661.53 crore. The jump was driven by finance cost and depreciation and amortisation, which together reflect the weight of a large asset base, higher capital work-in-progress, and the transition of recently commissioned units into the depreciation cycle. Even with those headwinds, NHPC reported an EBITDA of 2,518 crore and an EBITDA margin of 64 percent for Q1 FY27, keeping it among the stronger performers in regulated power.

A quarter shaped by hydro performance and a heavier cost structure

NHPC’s operational story remains centered on hydro. Over a decade, consolidated generation has shown resilience even through variability. Total generation moved from 28,024 MU in FY17 to 29,600 MU in FY26, with hydro still the anchor at 28,761 MU in FY26. The renewable contribution is rising from a low base. Solar generation increased to 782 MU in FY26 from 292 MU in FY25, while wind stayed roughly steady at 57 MU.

The early months of FY27 also highlighted NHPC’s growing role in national hydro output. In Q1 FY27, India generated 523 BU, of which hydro contributed 37 BU. NHPC’s consolidated hydro generation share was 9,486 MU, or 26 percent of national hydro generation for the quarter. The comparable figure in Q1 FY26 was 8,813 MU and a 22 percent share. That shift signals both better performance at NHPC’s stations and the impact of incremental commissioning, including the ramp-up of Subansiri Lower.

But the quarter was also marked by a sharp rise in finance cost. Consolidated finance cost increased to 605.76 crore from 260.80 crore in Q1 FY26. Depreciation and amortisation rose to 599.65 crore from 435.77 crore. Together, they explain why profit growth was modest despite strong top-line momentum. The underlying message is that NHPC is moving deeper into a capex-heavy phase, and the earnings profile will increasingly reflect project commissioning cycles.

Balance sheet signals a build phase: higher CWIP, lower cash, higher receivables

NHPC’s consolidated balance sheet at the end of Q1 FY27 reflects a company investing heavily while managing the working capital realities of the sector. Total assets and total equity and liabilities increased to 1,23,237.05 crore from 1,20,010.89 crore at FY26 year-end.

Capital work-in-progress increased to 36,515.50 crore from 34,947.58 crore, showing that a large portion of the upcoming capacity remains under construction and not yet earning regulated returns. PPE also rose to 46,861.67 crore from 45,775.59 crore. On the funding side, long-term borrowings increased to 47,704.83 crore from 46,173.52 crore, and deferred tax liabilities rose to 1,962.64 crore from 1,745.39 crore.

Working capital moved in a mixed direction. Trade receivables increased sharply to 4,354 crore from 2,629 crore. The disclosure shows that this included unbilled debtors of 2,425 crore as of 30.06.2026, up from 1,887 crore at 31.03.2026. Cash and bank balances declined to 2,049.48 crore from 3,651.04 crore. For a regulated utility, these shifts are not unusual, but the scale matters because it coincides with a major capex cycle.

The debtor mix is also worth watching. As of 30.06.2026, the top five debtors included Uttar Pradesh at 740 crore, Jammu and Kashmir at 714 crore, Rajasthan at 571 crore, Punjab at 469 crore, and Haryana at 320 crore. Amounts outstanding for more than 45 days were 262 crore, which is moderate relative to total receivables but still meaningful in a period where borrowing costs are visibly rising.

Returns, payouts, and valuation: stable ratios, but leverage remains a key variable

NHPC’s key ratios show stability on most metrics, with leverage staying elevated as expected for a capital-intensive generator. On a consolidated basis, Q1 FY27 PAT was 1,095.87 crore and net worth was 42,541.68 crore. Book value per share was 42.35, and the price to book ratio was 1.88. The price to earnings ratio was 18.31 based on the stock price as of 03.08.2026 at 79.81.

The debt equity ratio on a consolidated basis stood at 1.32 in Q1 FY27, broadly similar to FY26 at 1.31. That continuity suggests borrowings are rising but net worth is also expanding. The key question for investors is whether commissioning stays aligned with the capex curve, because the finance cost spike in Q1 FY27 shows the sensitivity of earnings to debt servicing during construction and ramp-up.

Dividend history adds another layer. In FY26, consolidated net profit was 3,776 crore and the dividend declared was 17.00 percent, split into an interim dividend of 14.00 percent and a final dividend of 2.10 percent. Dividend payout ratios have varied, with FY26 at 43 percent, down from 64 percent in FY25. That decline points to a more conservative cash stance as capex rises.

The operating platform is large, and the pipeline is even larger

NHPC’s consolidated installed capacity stood at 9,333 MW through 31 power stations as of 30.06.2026. This includes 8,771 MW of hydro and 562 MW of renewable energy. The company’s footprint spans 15 states and 2 union territories. On a consolidated basis, NHPC represents 16.85 percent of India’s installed hydroelectric capacity, measured as 8,771 MW out of 52,065 MW as of 30.06.2026.

The more important story is the pipeline and how it changes NHPC’s scale. Projects under construction total 9,204 MW, including 8,014 MW of hydro and 1,190 MW of solar. Projects awaiting clearances and approval total 10,263 MW. Projects under survey and investigation total 19,820 MW, including 17,930 MW of pump storage schemes and 1,890 MW of hydro.

That adds up to 48,620 MW of operational, under construction, under clearance, and under survey capacity. Not all of it will convert on the same timeline, but the portfolio shows a clear strategic direction: build a long runway in hydro, add renewables, and create flexibility through pump storage.

Commissioning momentum and major milestones

NHPC highlighted several operational and strategic milestones during the period. The most significant was the commissioning of 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. This is presented as the largest hydro power station in the country, and its ramp-up has already influenced generation numbers. The presentation also notes that the power station with highest generation during Q1 FY27 was Subansiri Lower at 1,316 MU.

There were also signs of progress on assets impacted by disruption. The restoration work of Teesta-V Power Station was completed and it restarted commercial operation in July 2026. On the growth front, the Cabinet Committee of Economic Affairs accorded investment approval to the 1,720 MW Kamala Hydroelectric Project in Arunachal Pradesh on 08.04.2026.

Another strategic step is the 3,097 MW Etalin Hydroelectric Project. NHPC signed a memorandum of agreement with the Government of Arunachal Pradesh on 16.06.2026 for implementation, and the environmental clearance was transferred in favour of NHPC on 22.07.2026. These steps matter because large hydro projects typically face long gestation and clearance risk. A clear path on approvals can reduce timeline uncertainty.

Capex plan, regulated equity, and what it implies for earnings

NHPC’s capex trajectory is rising steadily. Consolidated capex moved from 2,213 crore in FY19 to 13,689 crore in FY26, and the FY27 consolidated target is 15,000 crore. This is a sharp increase over the decade and fits with the pipeline data.

The company also presented a view of progressive capacity addition and regulated equity. For hydro, the current installed capacity referenced is 8,771 MW. The presentation outlines cumulative capacity targets rising to 11,515 MW in FY26-27, 12,055 MW in FY27-28, 12,905 MW in FY28-29, and 13,905 MW in FY29-30, linked to projects such as Subansiri Lower full commissioning, Rangit-IV, Pakal Duli, Kiru, Kwar, Ratle, Teesta VI, and stage-II expansions of Uri-I and Dulhasti.

Regulated equity is central to a utility’s earnings power. The presentation shows cumulative regulated equity increasing to 30,723 crore in FY26-27 and 31,415 crore in FY27-28, with expected additional PAT of 2,110 crore shown for FY27-28. It also shows additional expected PAT of 745 crore for FY30-31. The note clarifies that regulated equity is considered in the year of full commissioning, and full-year PAT is considered in the next financial year of commissioning, taking a conservative view as many projects are commissioned in the lean period.

For investors, this indicates that the earnings uplift from large commissioning can come with a lag, while costs like interest and depreciation can appear earlier. That timing gap is visible in Q1 FY27 where finance costs rose sharply and profit growth remained modest.

Subsidiaries add steadier cash flows and broaden the base

NHDC, a subsidiary with a 51:49 shareholding between NHPC and the Government of Madhya Pradesh, adds a stable storage-hydro component. It has installed capacity of 1,616 MW and reported generation of 6,209 MU in FY26 versus 5,575 MU in FY25. PAF was 97.85 percent in FY26. Revenue from operations was 1,305 crore in FY26 and PAT was 936 crore.

In Q1 FY27, NHDC reported generation of 863 MU versus 617 MU in Q1 FY26, revenue from operations of 275.62 crore versus 238.35 crore, and PAT of 165.85 crore versus 137.03 crore. Secondary energy for the quarter was 32.89 crore, compared with 2.53 crore in Q1 FY26. These numbers show that subsidiaries can provide performance stability even as the parent takes on construction risk and a higher capex load.

Renewable operations also extend through subsidiaries, with projects such as solar plants in Uttar Pradesh and Madhya Pradesh and a floating solar park at Omkareshwar. In aggregate, the renewable operating base remains small versus hydro, but the under-construction solar pipeline of 1,190 MW indicates that the mix will shift over time.

What to watch from here

NHPC’s Q1 FY27 results support a clear interpretation. Revenue growth is strong and supported by hydro generation performance and a larger operating base. Profit growth is positive but restrained by a step-up in finance cost and depreciation. The balance sheet shows expanding CWIP and higher receivables, typical of a build phase, but still important because they can affect cash generation.

The strategic picture is consistent: scale hydro through large projects under construction and under clearance, expand solar, and create flexibility through a sizeable pump storage pipeline. The capex target of 15,000 crore in FY27 suggests execution risk will remain an investor focus. At the same time, the regulated model, the company’s share in India’s hydro capacity, and the long runway of additions provide visibility.

For investors, the quarterly theme is disciplined expansion. The near-term numbers show the cost of building, but the pipeline shows why NHPC is building. If commissioning timelines hold and receivables remain controlled, the company’s regulated equity base and capacity additions can translate into a stronger earnings profile over the next few years.