NTPC's operating margin rises 4.69 points year on year
Revenue grew faster than expenses, but net profit growth lagged sharply behind pre-tax profit growth.
Filed 24 Jul 2026, 19:43 IST · after market close · NTPC Ltd (NTPC)
Key takeaways
- On a consolidated basis, NTPC's operating profit rose +37.58% year on year as revenue grew +7.81% while expenses increased only +1.72%.
- Operating margin expanded 4.69 percentage points year on year to 21.67%, but remained 14.35 percentage points below the Utilities peer median.
- Profit before tax rose +51.70% year on year, while net profit increased only +12.90% as tax expense grew +36.62%.
Price around the results
Lower cost growth drives Q1 operating leverage
NTPC's consolidated revenue grew +7.81% year on year, while expenses rose only +1.72%, lifting operating profit by +37.58%. The same pattern held sequentially: revenue increased +2.12% against expense growth of +0.62%, expanding operating margin by 1.17 percentage points. This was the fourth consecutive quarter of margin recovery from Q1FY26's 16.98%, although the trend included a small decline in Q4FY26.
Tax and depreciation dilute the pre-tax gain
Profit before tax grew +51.70% year on year, but net profit rose only +12.90% as tax expense increased +36.62%; the tax rate nevertheless fell to 28.25% from 31.37%, providing some support to earnings. Depreciation rose +14.10%, partly offsetting the operating improvement, while interest expense declined +2.35%. Other income fell 47.00% and contributed 5.00% of pre-tax profit, so the quarter's profit growth was not mainly driven by non-operating income.
Margin recovery still trails most reported utility peers
NTPC's 21.67% operating margin was 14.35 percentage points below the 36.02% median for the seven Utilities peers that had reported the same quarter. It ranked second from the bottom among those companies. The margin was nevertheless above the 20.50% recorded in Q4FY26 and the 16.98% reported a year earlier.
No immediate market reaction after the filing
The consolidated results were filed after market close on 24 Jul 2026, so there was no immediate market response to assess. After the eight most recent results, the stock rose twice and fell six times, with a median absolute move of 1.26%, indicating that declines have been more common than gains in its recent post-results history.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹50,741 cr | ₹49,688 cr | +2.12% | +7.81% |
| Other income | ₹401 cr | ₹723 cr | -44.58% | -47.00% |
| Expenses | ₹39,744 cr | ₹39,501 cr | +0.62% | +1.72% |
| Operating profit | ₹10,997 cr | ₹10,187 cr | +7.95% | +37.58% |
| Operating margin (%) | 21.67% | 20.50% | — | — |
| Interest | ₹3,386 cr | ₹3,737 cr | -9.39% | -2.35% |
| Depreciation | ₹5,234 cr | ₹5,134 cr | +1.95% | +14.10% |
| Profit before tax | ₹8,011 cr | ₹7,173 cr | +11.69% | +51.70% |
| Tax | ₹2,263 cr | ₹-9,062 cr | — | +36.62% |
| Net profit | ₹6,896 cr | ₹10,615 cr | -35.03% | +12.90% |
| EPS (₹) | ₹6.93 | ₹10.81 | -35.89% | +11.77% |
Operating margin of 21.67% compares with a Utilities sector median of 36.02% across 7 peers that have reported Q1FY27.
What to watch
- Whether operating margin holds above 21.67% next quarter.
- Whether expense growth remains below revenue growth after the Q1 gap of 1.72% versus 7.81% year on year.
- Whether the tax rate remains near 28.25% and other income stays at about 5.00% of pre-tax profit.