NHPC

Eyes Growth with ₹10,000 Cr Plan, Margin Volatility Persists

, India’s largest hydropower generator, saw its stock rise 8% after announcing a ₹2,000 crore bond issuance, part of a broader ₹10,000 crore fundraising plan for FY26. The move supports NHPC’s capex needs as it expands its renewable portfolio and contributes to India’s 55GW hydropower target by 2030. However, execution delays, rising finance costs, and flood-related disruptions continue to weigh on performance. Fundraising and Strategic Expansion - ₹2,000 crore bond via private placement, first tranche of ₹10,000 crore FY26 plan. - Supports capex for 9.7GW under construction, 7.7GW awaiting clearance, and 10.8GW under survey. - Diversifying into solar and wind, aligning with national clean energy goals. Q2FY26 Financial Performance - Revenue: ₹2,849.3 crore, up 10% YoY. - EBITDA margin: 60.2%, up from 59.1% YoY, but down sequentially from Q1. - One-off ₹160 crore loss due to flash floods impacted earnings. - Finance costs rose to ~10% of Q2 sales, up from 4% YoY. Operational Challenges and Risks - Plant availability factor slipped to 77% (FY24) and 74% (FY25) due to water flow volatility. - Standalone generation fell short, affecting topline. - Amalgamation with Jalpower Corp. (acquired via insolvency) adds debt complexity. Tariff Model and Margin Protection - NHPC operates under a cost-plus tariff model, offering partial margin insulation. - Successful commissioning of projects could unlock incentives and earnings upgrades. Valuation and Outlook - Trades at ~12x FY27 EV/EBITDA, per Bloomberg estimates. - ICICI Securities flags execution and leverage risks, but sees upside if project timelines hold. - Long-term growth hinges on timely commissioning and cost discipline.