NHPC’s profit rose 36% as new hydropower projects started selling electricity. For a company known for slow growth, it is an important change.
NHPC, the state-owned hydropower company, reported consolidated net profit of ₹1,657.57 crore for the September quarter, up 35.95% from ₹1,219.28 crore a year earlier. Revenue rose 29% to about ₹4,670 crore.
Standalone net profit rose even faster, by 64.82% from a year earlier. Compared with the June quarter, standalone profit rose about 37% from ₹1,113.41 crore.
The company’s board approved the results on 4 November, and they were reported on Thursday.
The investment cycle turns
The growth comes from new hydropower projects beginning to sell electricity, according to reports on the results.
That matters because hydropower projects take a very long time to build. Large dams in the Himalayas and the northeast can take a decade or more, facing geological problems, environmental challenges and local opposition. During construction, a company spends heavily but earns nothing from the project. That has held NHPC’s growth back for years: it was investing large amounts in projects that had not started producing.
As those projects come into operation, the picture changes. Revenue rises as new capacity sells power, and because hydropower plants have very low running costs once built, a large share of the extra revenue becomes profit. The 65% rise in standalone profit shows how much difference new capacity can make.
Why hydropower
The timing is good for NHPC. India’s power demand is growing strongly. NTPC, Coal India and NLC India have all reported strong results this season as electricity demand rose.
Hydropower has a particular advantage over solar and wind: it can be switched on and off quickly to meet demand peaks, such as the evening hours when solar power falls away. As India adds large amounts of solar capacity, the grid needs flexible sources like hydropower to balance supply and demand. That makes hydropower more valuable over time.
It is also domestic. Unlike gas-based power, which depends on imported LNG that became expensive during the Iran war, hydropower uses no imported fuel.
What to watch
The outlook depends on approvals and execution. NHPC’s tariffs, the rates at which it sells power, are set by regulators based on project costs, so the timing of tariff approvals affects reported earnings. Further projects coming into operation over the next few years will determine whether this growth continues.
Hydropower is also affected by the monsoon. Strong rainfall increases water flows and power generation, while weak monsoons reduce them. This year’s good monsoon helped the September quarter, but generation will vary from season to season.
For investors, NHPC’s results suggest that a long period of investment is starting to produce returns. If the company can keep bringing new projects online on time, its growth could be meaningfully faster than in the past decade. The main risks are project delays and cost overruns, which have been common in Indian hydropower and could slow that progress.
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