NHPC · risk themes across the available quarters.
Bear-case history
With insurance coverage limited to 12 months (completed September 2024), NHPC faces ~INR 450 crore annual fixed cost exposure for 15 more months until December 2025 estimated restart. This represents INR 40-50 crore annual under-recovery.
August 2024 landslide at tail race tunnel outlet and GIS building represents second disruption event. Management stated restoration to Q3 FY26 (December 2025), indicating potential further delays given challenging terrain.
Analyst raised concern about PPA signing delays for FDRE/hybrid projects. Management stated 9,000 MW tendered but only 7,000 MW PPAs signed; 1,200 MW pending with Uttar Pradesh Discom. While REA mode mitigates risk, revenue recognition timing remains uncertain.
Finance costs doubled to INR 526 crore in H1 FY25 vs INR 245 crore, primarily due to INR 331 crore increase in interest on arbitration/court cases. While recoverable through CERC petitions, cash flow timing remains uncertain.
At INR 7.5/unit levelized tariff based on INR 28,000 crore CapEx, there is uncertainty whether CERC will allow full cost recovery given 20-25 year project timeline. Management is confident due to delays being beyond control, but analyst questioned whether beneficiaries may push for concessions.
Only 6,000 MW of PPAs signed out of 20,000 MW bid out. DISCOMs are hesitant due to connectivity timelines (29-30 months), preference for RTC/assured peak power over standalone solar, and inadequate demand planning. Management hopes to sign 2,000-3,000 MW more in 2-3 months.
71% physical progress achieved but headrace tunnel excavation facing severe geological issues causing slower progress. While management is confident of 2029 commissioning, any geological surprise could delay the project significantly given the sensitivity of underground works.
Only 80% of estimated revenue being recognized pending CERC tariff notification. This creates a timing difference where ~20% of revenue (approximately INR 225 crore for Parvati-II alone) is deferred, understating true profitability until regulatory approval.
October 2023 flash flood caused complete shutdown; August 2024 landslide further delayed restoration. If January 2026 deadline is missed, INR 300+ crore annual PBT from Teesta-V remains at risk.
Combined PBT loss from Teesta-V, TLDP-III, and TLDP-IV is INR 400 crore versus normal INR 500 crore profit, directly impacting profitability. Management acknowledged this as the primary driver of PAT decline.
PF-based incentive declined INR 89 crore YoY to INR 227 crore, while secondary energy increased only INR 21 crore. Total incentive income dropped INR 74 crore, reflecting operational underperformance.
Parbati-II (~INR 2,000 crore annual revenue) and Subansiri (~INR 4,500 crore) await CERC tariff orders. Management will recognize only 90% provisionally, creating earnings visibility risk.