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NTPC Ltd

| Q2 FY26 Earnings Conference Call

BULLISH SENTIMENT

Report Source

⬤30th Oct 25

Summary : NTPC reports strong H1 FY26 performance with record capacity additions, significant renewable growth, and a positive outlook on India's power demand, despite ongoing EESL losses and weather-related generation impacts.

Management Perspective positive : Management expressed optimism about the economy and power sector, highlighting record capacity additions, strong financial performance, and clear visibility on future projects. They stated, 'FY26 so far has been a strong year for both NTPC and NGEL with record capacity addition and healthy financial performance.' and 'We remain optimistic about both the economy and the power sector.'

Concall Report Analysis & Insights

Business Overview

  1. NTPC Group capacity reached 83893 MW in H1 FY26, a 10% increase year-over-year.
  2. Added 4403 MW in H1 FY26, highest half-year capacity addition since inception.
  3. Coal stations maintained over 90% availability and 70.52% PLF, exceeding national average.
  4. Group PAT for H1 FY26 increased 4% to ₹11,334 crore, with subsidiaries' profit up 33%.
  5. NGEL's H1 FY26 revenue grew 19% to ₹1,292 crore, with EBITDA margin improving to 88%.

Future Growth Prospects

  1. Revised capacity target to 149 GW by 2032 and 244 GW by 2037, requiring ₹7 lakh crore capex.
  2. Pursuing 21 GW of Pumped Storage Projects (PSPs), with 12670 MW allocated for NTPC Group.
  3. Developing 1990 MWh BESS via TBCB, plus 6800 MWh co-located with solar/thermal projects.
  4. Entered green chemicals market, securing contract for 0.7 lakh tonnes of green ammonia.
  5. Exploring international partnerships for nuclear capacity in NTPC Parmanu Urja Nigam Limited.

Management Insights

  1. India's growing economy and digital infrastructure will drive sustained power demand.
  2. NTPC and NGEL are poised to capture power sector growth by balancing sources.
  3. Committed to enhancing shareholder wealth and improving business performance.
  4. Focus remains on timely completion of under-construction projects and fuel security.
  5. Expediting new capacities in coal, renewable, nuclear, and exploring energy storage.

Signs of Skepticism

  1. EESL losses are a serious concern for promoters, but a clear resolution timeline is not provided.
  2. Meja Phase 2 project requires State Government of UP approval, expected within two months.
  3. Exact numbers for BESS returns on equity are pending firm tie-ups, initially on merchant basis.
  4. RE capacity addition target for the year was reduced, with some Q2 slippage due to monsoon.
  5. NTPC does not intend to participate in tariff-based competition for thermal bidding.

Risk Factors

  1. EESL losses are expected to continue through FY26, impacting P&L.
  2. Subdued power demand in H1 FY26 due to milder summer and extended monsoon.
  3. Wind projects face Right-of-Way (ROW) challenges for heavy vehicle movement.
  4. RE capacity additions experienced slight slippage in Q2 due to monsoon season.
  5. Uncertainty regarding firm tie-ups for co-located BESS projects on merchant basis.

Good To Know

  1. NTPC declared a first interim dividend of ₹2.75 per equity share for FY2025-26.
  2. Fixed cost under-recoveries are ₹625 crore till September 2025, expected to be ₹250 crore by year-end.
  3. CERC Suo Motu order provides a structured framework for thermal station scheduling, ensuring feasible schedules.
  4. ESG ratings improved: MSCI from 3.4 to 4.1, Sustainalytics from 35.7 to 31.
  5. Commercial operation of Flue Gas Desulphurization systems for 20270 MW declared.

Key Drivers

  1. Record capacity additions achieved.
  2. Strong renewable energy growth.
  3. Nuclear energy journey begins.
  4. Improved ESG ratings.

Key Analyst Discussions

Competitive Environment

  1. NTPC does not plan to participate in tariff-based competition for thermal projects.
  2. NGEL is approaching TBCB tenders and C&I customers for PPAs.
  3. The CERC Suo-Moto order ensures feasible schedules for generators, improving operations.

Market Trends & Consumer Behavior

  1. Subdued demand in H1 FY26 due to milder summer and extended monsoon.
  2. Grid curtailment and extended monsoon impacted PLF and RE generation.
  3. Higher variable cost plants are more likely to have backing down.
  4. Peak hours tariff viability is a factor in BESS co-location decisions.

Financial Highlights

  1. EESL losses are expected to continue throughout FY26.
  2. Group CAPEX for H1 FY26 was ₹23,115 crore, up from ₹17,474 crore.
  3. NTPC Green capex expected to be ₹30,000 crore in FY26, rising to ₹45,000-₹46,000 crore in FY27.
  4. Adjusted consolidated PAT for Q2 FY26 was ₹5,069 crore.
  5. Regulated equity for FY28 can be worked out based on CODs and debt-equity.

Product Composition

  1. FY26 capacity target is 9844 MW (2019 MW standalone, 7825 MW JVs/subsidiaries).
  2. FY28 capacity target is 10564 MW (2120 MW thermal, 444 MW hydro, 8000 MW RE).
  3. Mahi Banswara nuclear project: 4 units of 700 MW (2800 MW total), ₹50,000 crore capex.
  4. Under-construction capacity: 17.3 GW coal, 2.18 GW hydro, 13.9 GW RE.
  5. Long-term capacity target (2032-2037): 13 GW thermal, 0.3 GW hydro, 130-140 GW RE, 2.1 GW nuclear.

Strategic Considerations

  1. 5 GW of co-located BESS with thermal plants will be fully regulated.
  2. BESS co-located with existing solar projects will not be regulated.
  3. New coal-based generation capacity ordering: 1.6 GW in FY26, 2.4 GW in FY27, 0.8 GW beyond.
  4. Mahi Banswara nuclear project excavation contract awarded, TG package expected FY26.
  5. RE capacity addition targets: 2 GW in Q3 FY26, 1.7 GW in Q4 FY26.
NTPC Ltd (NTPC) Concall Report Analysis & Insights | Dhanarthi