NHPC delivered exceptional fourth quarter results for FY26, with consolidated net profit surging 71.4% year-on-year to ₹1,464 crore compared to ₹854 crore in the corresponding quarter last year. According to latest reports, the company's revenue from operations increased 20% year-on-year to ₹2,816 crore from ₹2,347 crore in the previous year, demonstrating robust operational performance across all business segments. However, the impressive headline profit growth masks underlying operational challenges, as Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) saw a marginal 0.7% dip to ₹1,196 crore, leading to a sharp compression in EBITDA margin from 51.3% to 42.5% due to rising costs. This operational pressure contributed to the stock's subsequent decline of 2.12% to ₹76.79 on the NSE after results announcement, despite the substantial profit increase.
The board of directors recommended a final dividend of ₹2.10 per equity share of face value ₹10 each for FY26, subject to shareholder approval at the upcoming Annual General Meeting. This declaration comes in addition to the interim dividend of ₹1.40 per equity share that was paid in February 2026, bringing the total dividend payout for FY26 to ₹3.51 per share. In a key strategic move, the board approved the raising of funds through the issuance of listed, unsecured, non-cumulative, non-convertible, redeemable, taxable Series A1 Bonds up to ₹2,000 crore through private placement as part of NHPC's borrowing plan for FY 2026-27. The proposed final dividend of ₹2.10 per share represents a significant increase from the previously reported ₹0.21 per share, reflecting the company's strong cash generation capabilities despite margin pressures.
Pursuant to the Finance Act 2026, NHPC has opted to exercise the concessional tax regime under Section 200(5) of the Income-Tax Act, 2025 from FY 2026-27 onwards. Consequently, deferred tax liabilities as at March 31, 2026, have been remeasured at lower concessional rates, reducing the deferred tax expense by ₹1,156.60 crore for the year. The company's Joint Statutory Auditors have issued an unmodified (clean) opinion on both the standalone and consolidated annual audited financial results for the year ended March 31, 2026. Regarding the New Labour Codes (effective November 21, 2025), the management has assessed the impact as not material, and the same has been recognized in the financial results for the year ended March 31, 2026.
The process of merging Jalpower Corporation Limited (JPCL), a 100% wholly-owned subsidiary, with NHPC is ongoing with the second motion application currently pending before the Ministry of Corporate Affairs (MCA). NHPC confirmed that it has maintained a security cover of 100% or higher for its secured listed non-convertible debt securities and is in full compliance with all covenants under the respective Debenture Trust Deeds. The company's total financial indebtedness as of March 31, 2026, stood at ₹46,227.20 crore, with the company submitting a formal statement to stock exchanges confirming no outstanding defaults on loans or debt securities. However, the company faces significant financial challenges with a debt-to-equity ratio of 1.67 times and an interest coverage ratio of only 1.38, limiting its ability to manage debt payments effectively.
Despite the strong quarterly performance, NHPC shares declined during trading hours, falling 2.22% to ₹76.71 during the session before settling 2.12% lower at ₹76.79 on the NSE, compared to a 0.19% decline in the benchmark Nifty 50. The stock has experienced significant underperformance with a 11.59% decline over the last 12 months and 3.38% year-to-date, reflecting investor concerns about margin compression despite strong revenue growth. The quarterly results were declared after market hours, contributing to the immediate negative reaction from investors who were concerned about the sharp EBITDA margin contraction from 51.3% to 42.5% despite robust top-line performance.
