NHPC margin climbs as revenue growth outpaces costs in Q2FY27
The margin improved for a third straight quarter from the Q4FY26 low, but higher interest expense and other income of 9.91% of pre-tax profit affect earnings quality.
Filed 04 Nov 2026, 19:28 IST · after market close · NHPC Ltd (NHPC)
Key takeaways
- NHPC’s consolidated operating margin rose 3.92 percentage points year on year as revenue grew 33.20%, faster than expenses at 20.05%.
- Net profit increased 35.95% year on year despite interest expense rising 100.28%, while the tax rate fell 5.83 percentage points.
- Operating margin reached 64.15%, 21.81 percentage points above the 42.34% median for 19 Utilities peers that have reported.
Price around the results
Revenue growth lifts operating leverage
NHPC’s consolidated revenue grew 33.20% year on year and 17.70% sequentially, while expenses rose at a slower 20.05% and 10.35%, respectively. That spread lifted operating margin by 3.92 percentage points year on year and 2.39 percentage points from Q1FY27. The margin has now risen for three straight quarters, from 42.48% in Q4FY26 to 64.15%.
Interest cost limits pre-tax profit conversion
Operating profit grew 41.88% year on year, but pre-tax profit rose 20.67% as interest expense doubled from the year-earlier quarter; sequentially, interest expense declined 8.19%. The tax rate fell 5.83 percentage points year on year to 28.25%, which supported the 35.95% increase in net profit. Other income contributed 9.91% of pre-tax profit, so reported earnings were not entirely generated by operations.
Margin remains above the Utilities peer median
NHPC’s 64.15% operating margin was 21.81 percentage points above the 42.34% median among 19 Utilities companies that have reported the quarter. The results were filed after market close, so there is no current market reaction to assess. Across the last eight result reactions, the stock rose four times and fell four times, with a median absolute move of 1.63%.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹4,483 cr | ₹3,808 cr | +17.70% | +33.20% |
| Other income | ₹188 cr | ₹153 cr | +23.18% | -29.01% |
| Expenses | ₹1,607 cr | ₹1,456 cr | +10.35% | +20.05% |
| Operating profit | ₹2,876 cr | ₹2,352 cr | +22.26% | +41.88% |
| Operating margin (%) | 64.15% | 61.76% | — | — |
| Interest | ₹556 cr | ₹606 cr | -8.19% | +100.28% |
| Depreciation | ₹610 cr | ₹600 cr | +1.73% | +38.18% |
| Profit before tax | ₹1,898 cr | ₹1,299 cr | +46.03% | +20.67% |
| Tax | ₹536 cr | ₹376 cr | +42.70% | +0.00% |
| Net profit | ₹1,658 cr | ₹1,178 cr | +40.70% | +35.95% |
| EPS (₹) | ₹1.54 | ₹1.09 | +41.28% | +50.98% |
Operating margin of 64.15% compares with a Utilities sector median of 42.34% across 19 peers that have reported Q2FY27.
What to watch
- Whether operating margin holds above 64.15% after rising for three straight quarters.
- Whether interest expense continues to moderate after increasing 100.28% year on year.
- Whether the tax rate remains near 28.25% rather than reverting to the higher year-earlier level.