NHPC Limited Q3 FY26 Earnings Call Summary

Summary

NHPC Limited - Q3 FY26 Earnings Call Summary Friday, February 06, 2026 14:30 IST

Event Participants

Executives 5 Bhupender Gupta (CMD), Mahesh Kumar Sharma (Director Finance), Sanjay Kumar Singh (Director Projects), Suprakash Adhikari (Director Technical), Uttam Lal (Director Personnel)

Analysts 3 Murtuza Arsiwalla (Kotak Securities), Prashant Kshirsagar (Unived Corporate Research), Ragini Pande (Elara Capital)

Financials & KPIs

Geographic & Segment Commentary

• Hydro Power: Significant capacity addition in progress with Parbati-II (800 MW) operational and Subansiri Lower (2000 MW) units currently commissioning. 9M total generation reached 25,849 MUs, though Plant Availability Factor dropped 3% to 79.27% due to monsoon-related shutdowns at Dulhasti and Salal.
• Solar & Renewables: Fully commissioned the 300 MW Karnisar Solar Project in Bikaner, now NHPC’s largest solar asset. Construction is active on 1,190 MW of solar capacity, including 600 MW in Gujarat and 100 MW in Andhra Pradesh, targeted for completion by late 2026.
• Pumped Storage Plants (PSPs): Actively developing a pipeline of ~5,500-6,000 MW across Madhya Pradesh, Maharashtra, and Odisha. Management aims to start construction on at least two projects (2,000 MW) in 2026 with estimated generation costs of ₹4.50/unit (₹7.00/unit total cost).

Company-Specific & Strategic Commentary

• Subansiri Lower Progress: Two units (500 MW) are in commercial operation; the third and fourth are expected by March 2026. All eight units (2000 MW) are targeted for completion by December 2026, with an estimated levelized tariff of ₹7.50/unit.
• New Project Pipeline: Planning to commence 5-6 new projects totaling ~10,000 MW in FY27, including Etalin (3,097 MW), Sawalkot (1,856 MW), and Kamala (1,720 MW). Etalin construction is slated to start in July/August 2026 following the takeover from SJVN.
• Asset Monetization & REIA: Acted as a Renewable Energy Implementing Agency (REIA) with 6,000 MW of PPAs signed out of 20,000 MW bid out. Management noted a slowdown in Discom PPA signing due to grid connectivity delays and a preference for RTC/Storage-linked power over standalone solar.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Revenue Accounting (Subansiri & Parbati)

• Question: Is there under-accounting of revenue due to pending tariff orders? (Murtuza Arsiwalla)
• Answer: Yes, NHPC accounts for only 80% of estimated revenue for newly commissioned units until the CERC notifies final tariffs. This leads to a temporary drag on profits as 100% of expenses are recognized (Saroj Kumar Roy).

Subansiri Tariff Viability

• Question: Will states absorb the ₹7.50/unit tariff for Subansiri Lower? (Prashant Kshirsagar)
• Answer: All PPAs are already in place. Delays were beyond management control (9-year stall), which under CERC regulations allows for full cost recovery. It remains competitive as peaking clean power (Mahesh Kumar Sharma).

Dibang Project Status

• Question: What is the status of the dam tender for the 2880 MW Dibang project? (Prashant Kshirsagar)
• Answer: The price bid for the dam package was opened on the day of the call. NHPC expects to award the contract within February 2026, marking the last major award for the project (Bhupender Gupta).

REIA Obstacles

• Question: Why is PPA signing slow for solar projects? (Rupesh Sankhe)
• Answer: Discoms now prefer Round-The-Clock (RTC) or Firm and Dispatchable RE (FDRE) over standalone solar. Connectivity for new projects is only available by 2029-30, making Discoms hesitant to sign current PPAs (Bhupender Gupta).

Key Takeaway

NHPC delivered a resilient performance in 9M FY26, with revenue up 10% to ₹8,800 crores and generation increasing 15% following the commissioning of Parbati-II. The company reached a critical milestone with the commercial operation of the first 500 MW of the 2,000 MW Subansiri Lower project, though profitability remains temporarily suppressed as the firm conservatively recognizes only 80% of revenue pending CERC tariff orders. Strategic focus is shifting toward an aggressive growth phase, with plans to initiate 10,000 MW of new hydro capacity in FY27, including the mega Etalin and Sawalkot projects, alongside a 2,000 MW foray into Pumped Storage. While geological risks in the Teesta and Rangit basins persist and standalone solar PPA signing by Discoms has slowed, NHPC’s robust CAPEX guidance of ₹15,000 crores for FY27 underscores its pivotal role in India’s energy transition. The company is well-positioned to capitalize on the increasing demand for peaking and storage power as more solar enters the national grid.