NTPC’s consolidated profit rose 41% as India used more electricity than ever during the energy crisis. The main parent company grew profit only 14%, and its margins narrowed. Most of the faster growth is coming from NTPC’s subsidiaries, including its renewable energy arm.
NTPC, India’s largest power producer, reported consolidated net profit of ₹7,351 crore for the September quarter, up 40.7% from a year earlier. Profit attributable to shareholders rose 38.7% to ₹7,030 crore. Consolidated revenue rose 21.2% to ₹54,270 crore, and consolidated EBITDA rose 22% to ₹15,627 crore.
The board declared an interim dividend of ₹3 a share, with a record date of 6 November.
Two different growth rates
The parent company’s figures are more modest. Standalone profit rose 14.3% to ₹5,320 crore on revenue up 16.8% to ₹45,752 crore. Standalone EBITDA grew only 9% to about ₹10,900 crore, and the margin fell 178 basis points to 23.8%. Standalone profit was slightly lower than in the June quarter.
So most of the strong consolidated growth is coming from NTPC’s subsidiaries and joint ventures, not from its own coal plants.
Parent under pressure
Fuel is the main reason. Consolidated fuel costs rose to ₹28,628 crore from ₹23,062 crore a year earlier. NTPC’s coal plants depend on Coal India, imported coal and some gas. With imported coal and gas expensive and domestic coal supply tight, as Coal India’s results showed this week, fuel costs have risen faster than tariffs.
Most of NTPC’s power is sold under regulated long-term contracts that eventually pass fuel costs on to buyers, but with a delay. When fuel costs rise quickly, margins narrow before tariffs catch up.
Why subsidiaries are growing
The fast-growing parts of NTPC are elsewhere. NTPC Green Energy, its listed renewable arm, reported a 57% profit increase this week, with revenue up 53%. Consolidated revenue from solar plants rose to ₹1,138 crore from ₹723 crore. Revenue from other segments, including power trading, rose 49% to ₹7,349 crore.
Power trading is especially profitable when electricity is scarce and spot prices are high. That is the situation now, with power generation growing 11% in September as India relies on coal and renewables to replace imported gas.
The energy shift
NTPC’s results reflect the change happening in Indian power. The company is still mostly coal-based, but its growth now comes increasingly from solar, wind and trading. NTPC Green has become one of India’s largest renewable developers.
The energy crisis has made that shift more urgent. Every unit of electricity from solar or wind reduces dependence on imported fuel. With Brent above $110, the economic case for domestic renewables is stronger than before.
What to watch
The next few quarters will show whether the parent company can recover its margins as tariffs catch up with fuel costs, and whether renewable growth can make up for slower coal-plant growth. Investors will also watch NTPC’s capacity additions, since India needs much more generation as demand keeps rising.
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