# 1. Financial Performance ## A. Key Figures * **Revenue from Operations (9M FY'26):** ₹8,800 Cr (+10%) * **PAT (9M FY'26):** ₹2,306 Cr (+7%) * **Revenue from Operations (Q3 FY'26):** ₹2,221 Cr (–3%) * **Other Income (9M FY'26):** ₹766 Cr (–25%) * **Other Income (Q3 FY'26):** ₹272 Cr (–18%) * **Finance Cost (9M FY'26):** ₹849 Cr (–29%) · **Q3 FY'26:** ₹310 Cr (–52%) * **Depreciation & Amortization (9M FY'26):** ₹1,334 Cr (+52%) · **Q3 FY'26:** ₹457 Cr (+54%) * **Other Expenses (9M FY'26):** ₹2,946 Cr (+97%) · **Q3 FY'26:** ₹1,537 Cr (+218%) * **Employee Cost (9M FY'26):** ₹1,096 Cr (–22%) · **Q3 FY'26:** ₹346 Cr (–50%) ## B. Revenue Drivers & Incentives * **Underlying Revenue Growth:** Despite a reported Q3 decline, core revenue improved YoY when adjusting for **one-off prior-year items totaling ~₹500 Cr** (pay anomaly, arbitration interest). * **Generation Momentum:** Q3 power generation rose **23%**, supported by full ramp-up at Parbati-II and **incremental output from subsidiary NHDC** now contributing as secondary energy. * **Incentive Surge:** Q3 incentives tripled to **₹282 Cr** from ₹159 Cr, driven by **₹123 Cr increase in secondary energy incentives** due to NHDC’s excess generation. * **PAF Dynamics:** PAF-based incentives remained stable in 9M but rose in Q3 to **₹39 Cr**; PAF charges declined, reflecting improved performance compliance. ## C. Profitability & Taxation * **Elevated Tax Burden:** 9M tax expenses surged to **₹1,496 Cr** from ₹1,108 Cr due to deferred tax adjustments and **MAT credit recognition**, pressuring PAT growth despite strong operational gains. * **Adjusted Earnings Clarity:** Q3 adjusted PAT adds back **₹116 Cr loss from Parbati-II**, indicating underlying profitability was stronger than reported. * **No Under-Recoveries:** Company remains financially compliant with **no under-recoveries**, operating within normative benchmarks. ## D. Cost Structure & Commissioning Impact * **Cost Reversal in Pay Anomaly:** Sharp YoY decline in employee costs driven by **lapse of ₹363 Cr in prior-year remuneration anomaly expenses**, providing significant margin relief. * **Interest Cost Transformation:** Finance costs dropped sharply due to **resolution of arbitration-related interest**, more than offsetting higher borrowing costs from newly commissioned assets. * **Rising Fixed Charges:** Post-commissioning, **depreciation and interest on Parbati-II, Subansiri Lower, and Karnisar Solar** are now flowing through P&L, increasing base costs. * **G&A and Insurance Inflation:** Other expenses surged on **₹781 Cr increase in General Network Access charges** and higher insurance outlays, signaling structural cost pressures. --- # 2. Generation & Capacity ## A. Key Figures * **Power Generation:** **25,849 MUs** 9M FY'26 (+15%) · **22,397 MUs** 9M FY'25 * **Capacity Addition:** **1,350 MW** added by Dec-2025 · **2,100 MW** expected by Mar-2026 ## B. Power Output * **Robust Generation Growth:** Strong double-digit power output increase driven by commissioning of the 800 MW Parbati-II station and higher output from Parbati-III. * **Near-Term Capacity Ramp-Up:** Additional **2,100 MW** of capacity, led by the Subansiri project, on track for completion by end-March 2026, including a **250 MW** unit commissioned in February. ## C. Plant Availability * **Temporary Availability Dip:** Plant Availability Factor declined 3 percentage points to 27% due to monsoon-related outages at key stations, with full recovery expected by year-end. * **Kamala Project Progress:** Land acquisition in advanced stage; surveys complete and award pending post-Panchayat elections, with all clearances expected by end-March. ## D. Project Commissioning * **Execution Timeline Set:** Contract award expected in April–May 2024, with construction start targeted for May–June 2024, subject to tender finalization. --- # 3. Project Portfolio ## A. Key Figures * **Dibang Project:** **2,880 MW** (target completion 2032) · **₹46/unit** tariff * **Teesta-VI Project:** **71%** physical progress · **₹8,449 Cr** estimated cost · **~₹5,000 Cr** spent by Dec’25 * **Rangit-IV Project:** **95%** progress · **120 MW** capacity · commissioning by **Oct/Nov 2026** * **Ratle Project:** **26%** progress · **850 MW** · completion by **Nov 2028** * **Pakal Dul & Kiru Projects:** **77%** progress each · **1,000 MW & 624 MW** · completion by **Dec 2026** * Kwar Project: 27% progress · 540 MW · completion by Mar 2028 · ₹4.44/unit tariff * **Subansiri Lower Solar:** **2000 MW** commissioned · **₹25,691 Cr** spent · **₹27,949 Cr** revised cost * **Karnisar Solar:** **300 MW** fully commissioned (largest solar asset) * **CPSU Solar Target:** **300 MW** commissioned · **700 MW** remaining (100 MW AP by **Jun 2026**, 600 MW Gujarat by **Dec 2026**) * **GSEC Khavda Solar:** **200 MW** (Stage-III) · completion by **Mar 2026** * Pumped Storage Pipeline: 5,500–6,000 MW in DPR stage · ~2,000 MW from 2–3 projects to start in 2026 ## B. Hydro Projects * **Execution Momentum:** Broad-based progress across key hydro assets, with **Pakal Dul, Kiru, and Rangit-IV** nearing final stages and **Ratle** and **Kwar** gaining traction. * **Dibang Advancement:** All major contracts now awarded or imminent, with **favorable geology** and **advanced underground works** supporting confidence in 2032 completion. * **Etalin Clarity:** Project confirmed on **NHPC’s balance sheet**, with **90% land acquired**, clearances secured, and **construction start expected Jul–Aug 2026**, aided by recent high-level site resolution. * **Pipeline Scale & Timing:** **~10,000 MW** from **5–6 new projects** (including **3,097 MW Etalin**, India’s largest) to begin construction between **FY27 Q1–Q3**, supported by improved terrain vs. past challenges. * **Teesta-VI Recovery:** Project at **71% physical progress** despite legacy issues, with active efforts to accelerate execution post-NCLT takeover. ## C. Solar Projects * **Commercial Ramp-Up:** **500 MW** of Subansiri Lower Solar now operational, with full **2,000 MW** project on track for completion by **Dec 2026**, spending at **92%** of revised cost. * **CPSU Leadership:** **Karnisar (300 MW)** is NHPC’s largest operational solar project; remaining **700 MW** under CPSU to be commissioned by **mid-2026**, reinforcing execution capability. * **Near-Term Solar Outlook:** **Over 1,000 MW** of solar capacity expected to be commissioned in **calendar year 2026**, including GSEC Khavda (200 MW) and CPSU balance. ## D. Pumped Storage * **Strategic Expansion:** PSPs emerging as a key growth vector, with **5,500–6,000 MW** in development across **8 states**, led by **Masinta (1,000 MW)** and **Omkareshwar (640 MW)**. * **Near-Term Construction Start:** Plans to launch **at least two PSPs (~2,000 MW)** in **2026**, targeting **₹50/unit generation cost**, aligning with grid stability and renewable integration goals. --- # 4. Tariff & Revenue Recognition ## A. Key Figures * **Parbati-II Revenue (9M):** ₹900 Cr (80% of ₹1,125 Cr estimate) * **Subansiri Transmission Charges:** ₹781 Cr (through Dec 2025) * Subansiri Levelized Tariff: ₹7.50/unit (based on ₹28,000 Cr CAPEX) ## B. Interim Accounting * **Conservative Revenue Recognition:** Parbati-II and Subansiri applying **80% interim revenue recognition** pending CERC final tariff, aligning with regulatory precedent and ensuring accounting consistency. * **Profitability Timing Impact:** Interim policy results in **understated profitability** as 100% of costs are expensed against only 80% of revenue, though no direct earnings loss is incurred. * **Future Revenue Upside:** **Additional recoverable charges** expected for Subansiri as units are commissioned, with transmission charges declining over time due to availability-based pricing. * **High-Tariff Justification:** ₹50/kWh rate supported by **9-year project delay** from force majeure factors, clean peaking power profile, and **25-year revenue stability**, accepted by CERC and stakeholders. ## C. CERC Approval Timeline * **Interim Tariff Path Clear:** Parbati-II expected to receive interim tariff in **5–6 months**; Subansiri petition to be filed by **early March'26**, with interim decision anticipated within **2 months**. * **Final Approval Uncertain:** No defined timeline for final CERC tariff orders; Subansiri’s final petition awaits **last unit commissioning**, creating a **timing difference** in full revenue realization. ## D. PPA Status * **PPAs Secured, Tariff Pending:** All PPAs for Parbati-II and Subansiri are in place; beneficiary states will honor **binding tariffs** once CERC issues final determination. * **Hybrid Demand Accelerating:** Discoms increasingly favor **solar-wind-battery hybrids** for **24x7 RTC or peak power**, shifting away from standalone solar. * **Strong Market Traction:** Recent renewable bids show robust developer interest, including **1,200 MW Punjab mandate attracting ~15 bidders**, though **PPA signing lags** with only 6,000 MW executed out of 20,000 MW bid out. --- # 5. Capital Allocation ## A. Key Figures * **CAPEX:** **₹8,844 Cr** consolidated (9M FY26) (+19% YoY) · **₹7,405 Cr** prior year (9M) ## B. CAPEX Spend * **Strategic Diversification:** Expansion into **solar power** complements core hydro and pumped storage pipeline, signaling long-term energy mix evolution. * **Growth Execution:** Robust YoY increase in capital spending reflects active project momentum and pursuit of both **organic and inorganic growth opportunities**. ## C. Funding Plan * **Project Reimbursement:** NHPC to reimburse SJVN for pre-transfer costs on Etalin Hydroelectric Project, primarily covering **land procurement** expenses. --- # 6. Regulatory & Tariff Risks ## A. Regulatory Approvals & Cost Recovery * **Headline:** Final project commissioning contingent on **Central Electricity Authority** clearance for technical and financial viability. * **Headline:** NHPC expects full cost and tariff approval from **CERC** for Subansiri Lower, citing regulatory provisions for uncontrollable delays. * **Headline:** Management to aggressively defend capital cost inclusion in tariff petition, reflecting high confidence in disallowance risk mitigation. ## B. PPA & Market Challenges * **Headline:** Parbati-II and Subansiri face **20–25 year commissioning delays**, contributing to conservative financial projections. * **Headline:** PPA execution hindered by **declining near-term renewable demand** and **grid connectivity constraints** scheduled for 2029–2030. * **Headline:** RE developers engaged at ministerial level to resolve bottlenecks; **2,000–3,000 MW of PPAs** potentially imminent within 2–3 months. --- # 7. Guidance & Outlook ## A. Key Figures * **CAPEX Guidance:** **₹13,300 Cr** FY27 · **₹15,000 Cr** FY28 · **₹12,000–13,000 Cr/year** thereafter * **Capacity Addition:** **2,744 MW** hydro in FY27 ## B. Capacity Additions * **Full Confidence in Offtake:** Management expresses 100% confidence in the **easy sellability** of new hydro capacity, especially to solar portfolio holders. * **Strategic Growth Trajectory:** NHPC positioned for long-term expansion across **hydro, pumped storage, and renewable energy**, supported by project completions and new initiatives. ## C. Financial Forecast * **Robust Forward Outlook:** Company guides to **strong financial performance** over the next 12 months, with expectations of a **much better year ahead**.