NHPC Limited, India’s largest hydropower generator and a Navratna government enterprise, reported a 68.5% year-on-year jump in consolidated net profit for the quarter ended March 31, 2026, with profit for the period rising to ₹1,549.42 crore from ₹919.63 crore in Q4 FY25. Revenue from operations grew 20% year-on-year to ₹2,815.53 crore from ₹2,346.97 crore, driven by higher hydro generation and improved realisations.
Q4 FY26 key numbers
Total income for the quarter was ₹3,120.52 crore against ₹2,557.71 crore in Q4 FY25 — a 21.9% increase. Total expenses rose to ₹2,835.89 crore from ₹1,444.73 crore — a sharp jump driven primarily by higher finance costs of ₹574.28 crore against a credit of ₹12.09 crore in Q4 FY25, and depreciation of ₹642.01 crore against ₹314.74 crore — both reflecting new project commissioning.
Profit before exceptional items and tax was ₹285.44 crore against ₹1,113.09 crore in Q4 FY25 — a significant decline at the operating level. However the tax line transformed the bottom line completely.
The deferred tax credit that made the profit number
The standout element of Q4 FY26 is the tax line. NHPC recorded a deferred tax credit of ₹1,969.99 crore in Q4 — against a deferred tax charge of ₹23.97 crore in Q4 FY25. Combined with current tax of ₹146.79 crore, total tax expense swung to a net credit of ₹1,823.20 crore. This deferred tax credit — one of the largest recorded by any listed PSU in a single quarter — produced the ₹2,108.64 crore profit before regulatory deferral account movement.
After accounting for a regulatory deferral account balance movement of negative ₹559.22 crore — relating to the treatment of costs deferred under regulatory accounting for hydropower tariffs — the final reported profit for the period was ₹1,549.42 crore.
Deferred tax credits of this scale typically arise from recognition of previously unrecognised deferred tax assets or reassessment of deferred tax liabilities linked to regulatory assets. The specific basis will be disclosed in NHPC’s full notes — investors should verify whether this is a recurring or one-time benefit before drawing earnings trajectory conclusions.
Full year FY26 performance
For the full financial year ended March 31, 2026, consolidated revenue from operations grew 11.9% year-on-year to ₹11,615.29 crore from ₹10,379.86 crore in FY25. Total income was ₹12,686.09 crore against ₹11,614.61 crore. Full-year net profit was ₹4,220.46 crore against ₹3,411.73 crore in FY25 — a 23.7% increase.
Full-year profit before exceptional items and tax was ₹2,910.32 crore against ₹4,489.75 crore in FY25 — a significant decline reflecting higher depreciation of ₹1,975.85 crore against ₹1,193.04 crore and higher finance costs of ₹1,423.02 crore against ₹1,188.94 crore as new projects commissioned during the year added to the asset base and debt servicing load. The full-year tax line produced a net credit of ₹326.78 crore against an expense of ₹1,355.46 crore in FY25 — driven by the ₹1,165.39 crore deferred tax credit — which bridged the gap between the lower pre-tax profit and the higher reported net profit.
The regulatory deferral account
NHPC operates under regulated tariffs set by the Central Electricity Regulatory Commission. Costs that are recoverable through future tariff revisions but not yet billed are deferred in the regulatory deferral account — a mechanism specific to regulated utilities. The full-year movement in regulatory deferral account balances was negative ₹983.36 crore against a positive ₹277.44 crore in FY25, contributing to the reported profit figure. Understanding this line is essential for assessing the quality and sustainability of NHPC’s reported earnings.
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