NLC India Q2 profit rises to Rs 1,328 crore on tax credit

NLC India Limited (NLC India) reported consolidated profit of Rs 1,328.01 crore for the quarter ended September 30, 2026, up from Rs 724.80 crore a year earlier, after recording a Rs 987.74 crore deferred-tax credit. The tax outcome offset a decline in profit before tax to Rs 464.65 crore from Rs 921.34 crore.

Why did NLC India’s Q2 profit rise despite lower pre-tax profit?

NLC India’s Q2 profit rose because a net tax credit of Rs 863.31 crore converted pre-tax profit of Rs 464.65 crore into profit after tax of Rs 1,327.96 crore before associate and joint-venture income. In the quarter ended September 30, 2025, NLC India reported pre-tax profit of Rs 921.34 crore, tax expense of Rs 196.61 crore and profit after tax before associates of Rs 724.73 crore.

The main item was a Rs 987.74 crore deferred-tax credit in Q2 FY2026-27, compared with a Rs 54.20 crore credit in Q2 FY2025-26. NLC India said it remeasured deferred-tax assets and liabilities during the half year ended September 30, 2026 under the new tax regime rather than the old regime, following the option exercised for FY2025-26. It disclosed the impact of that change as Rs 714.17 crore.

Current-year tax was Rs 94.49 crore and tax expense on rate-regulated accounts was Rs 29.94 crore in the September 2026 quarter. These charges were more than offset by the deferred-tax credit. Share of profit from associates and the joint venture was Rs 0.05 crore, taking reported profit for the period to Rs 1,328.01 crore.

What changed in NLC India’s revenue and costs?

NLC India’s revenue from operations increased to Rs 4,732.35 crore in Q2 FY2026-27 from Rs 4,178.41 crore a year earlier, while total income rose to Rs 4,826.61 crore from Rs 4,346.72 crore. Revenue was nearly unchanged from Rs 4,716.75 crore in the preceding quarter ended June 30, 2026, but other income declined to Rs 94.26 crore from Rs 151.10 crore sequentially.

Total expenses increased to Rs 4,530.66 crore from Rs 3,615.72 crore in the prior-year quarter. Fuel consumed rose to Rs 1,163.83 crore from Rs 825.33 crore, while depreciation and amortisation increased to Rs 728.53 crore from Rs 547.94 crore. Changes in inventories were an expense of Rs 104.80 crore, compared with income of Rs 112.92 crore in Q2 FY2025-26.

Finance costs reached Rs 437.57 crore in Q2, compared with Rs 289.18 crore a year earlier and Rs 382.12 crore in the June 2026 quarter. As a result, profit before exceptional items, tax and regulatory deferral-account movement fell to Rs 295.95 crore from Rs 731.00 crore. Net movement in regulatory deferral-account balances added Rs 168.70 crore, below the Rs 190.34 crore recorded a year earlier.

Which NLC India segments contributed to Q2 performance?

Thermal power remained NLC India’s largest segment by Q2 revenue at Rs 3,760.93 crore, followed by mining at Rs 2,295.88 crore and renewable power at Rs 242.26 crore. Segment revenue includes intra-group transactions, and Rs 1,566.72 crore of inter-segment revenue was eliminated to arrive at consolidated revenue from operations of Rs 4,732.35 crore.

Thermal-power revenue rose from Rs 3,394.65 crore in Q2 FY2025-26, mining revenue increased from Rs 2,164.42 crore, and renewable-power revenue grew from Rs 194.11 crore. However, mining segment profit before tax and interest declined to Rs 321.87 crore from Rs 411.41 crore, while thermal-power segment profit declined to Rs 358.82 crore from Rs 483.72 crore.

Renewable power was the only reported operating segment to record higher Q2 profit before tax and interest, at Rs 132.61 crore compared with Rs 116.75 crore a year earlier. Total segment profit before tax and interest declined to Rs 813.30 crore from Rs 1,011.88 crore. After Rs 437.57 crore of finance cost and Rs 79.73 crore of net unallocated expenditure, profit before regulatory-account movement was Rs 296.00 crore.

What do NLC India’s cash flow and balance-sheet figures show?

NLC India generated net cash from operating activities of Rs 2,771.70 crore in the half year ended September 30, 2026. Investing activities used Rs 1,996.64 crore and financing activities used Rs 835.93 crore, resulting in a Rs 60.87 crore decline in cash and cash equivalents to Rs 650.61 crore from Rs 711.48 crore on March 31, 2026.

Purchases of property, plant, equipment and preliminary expenses totalled Rs 3,895.33 crore in the half year, partly offset by Rs 1,875.73 crore from sale of property, plant, equipment and projects from continuing operations. Net long-term borrowings increased by Rs 613.60 crore, net short-term borrowings fell by Rs 257.62 crore, and interest paid was Rs 1,190.14 crore.

Total assets and regulatory deferral-account debit balances stood at Rs 67,384.65 crore on September 30, 2026, compared with Rs 65,202.26 crore on March 31, 2026. Paid-up debt capital was Rs 28,157.92 crore and net worth was Rs 23,400.83 crore, producing a debt-equity ratio of 1.20, compared with 1.29 at the March 2026 year-end.

Which regulatory and project matters could affect NLC India next?

NLC India is accounting for thermal billing under Central Electricity Regulatory Commission, or CERC, orders for the 2019-24 period while awaiting tariff orders for 2024-29. It recognised Rs 44.64 crore of income in Q2 FY2026-27 and Rs 283 crore cumulatively in the regulatory deferral account based on 2024-29 operating norms. It also recognised Rs 76.69 crore of Q2 regulatory income for expenses subject to CERC review.

Advances recoverable from BGRESL for the Neyveli Uttar Pradesh Power Limited project stood at Rs 1,537.12 crore on September 30, 2026, including Rs 567.41 crore of accrued interest and liquidated damages. NLC India made a 100% provision for the full amount after its recoverability assessment, while stating that it continues to pursue recovery and retains contractual and legal rights.

NLC India also continued its renewable-energy reorganisation. It completed Phase II of the transfer of renewable assets to NLC India Renewables Limited, involving 708.96 megawatts of assets for Rs 853.97 crore based on assets and liabilities as of September 1, 2026. During Q2, NLC India Renewables Limited formed two green-energy joint ventures, including one with Odisha Renewable Energy Development Agency on a 51:49 equity basis and another with PTC India Limited on a 74:26 basis.

Conclusion

NLC India’s Rs 1,328.01 crore Q2 profit was driven principally by the deferred-tax credit rather than higher pre-tax earnings. Revenue increased to Rs 4,732.35 crore, but higher fuel, depreciation and finance costs reduced pre-tax profit, while renewable power improved segment profit and mining and thermal power reported lower segment profit.

The next results may provide updates on CERC tariff orders for 2024-29 and the final tariff order for Neyveli Mines, where billing remains provisional. NLC India’s recovery efforts for the fully provided Rs 1,537.12 crore BGRESL balance and the development plans of its two new renewable joint ventures also remain disclosed matters to watch.