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NTPC Ltd

| Q3 FY26 Earnings Conference Call

BULLISH SENTIMENT

Report Source

⬤4th Feb 26

Summary : NTPC demonstrates strong Q3 FY26 financial and operational growth, driven by significant capacity additions across thermal, renewable, and pumped storage, while strategically expanding into nuclear power and energy storage despite some renewable curtailment and project delays.

Management Perspective positive : Management consistently highlighted strong capacity additions, financial performance growth, and strategic positioning for future demand. Phrases like 'remain on track to achieve one of the highest annual capacity addition', 'key positive indicator', and 'optimistic about our role in powering a developed India' indicate a confident outlook.

Concall Report Analysis & Insights

Business Overview

  1. NTPC Group added 1,744 MW in Q3 FY26, including 800 MW thermal, 694 MW renewables, and 250 MW pumped storage.
  2. Total capacity addition in FY26 (10 months) reached 6,615 MW, the highest achieved.
  3. NTPC's standalone PAT for Q3 FY26 grew 5.85% to INR4,987 crores.
  4. Group PAT for 9 months FY26 increased 5.45% to INR16,931 crores.
  5. NGEL added 2,108 MW renewable capacity in FY26, reaching 8,010 MW total commercial capacity.

Future Growth Prospects

  1. NTPC aims for 5 GW renewable capacity addition in FY26, with 8 GW targeted for FY27 and FY28.
  2. Planned thermal capacity additions include 1,600 MW (Patratu Unit 2 & 3) in FY27 and 2,120 MW (TTPS Stage 3, Lara Stage 2) in FY28.
  3. The SHANTI Nuclear Act provides a clear pathway to scale nuclear capacity, leveraging NTPC's strengths.
  4. Focus on long-duration energy storage systems, including a 100-MWh redox battery at Khavda Solar project.
  5. Exploring international presence and partnerships for advanced nuclear technologies.

Management Insights

  1. Management is on track to achieve one of the highest annual capacity additions this fiscal year.
  2. Power demand is showing an increasing trend, supported by improving economic indicators.
  3. The SHANTI Act enables NTPC to scale nuclear capacity and strengthen long-term energy security.
  4. NTPC is balancing conventional and non-conventional sources for reliability, affordability, and sustainability.
  5. The company is committed to enhancing shareholders' wealth and improving performance across all business facets.

Signs of Skepticism

  1. Analyst questioned the aggressive nature of green ammonia project bids and their alignment with return thresholds.
  2. Analyst sought clarification on the reasons for states pushing Section 63 tenders over Section 62.
  3. Analyst inquired about the specific confidence level for 2.5 GW connectivity commissioning within two months.
  4. Management's explanation for Q2-Q3 profit dip in NGEL due to 'initial stabilization period' and depreciation timing.

Risk Factors

  1. Renewable generation faced significant curtailment, losing 420 million units in NGEL and 212 million units in NREL.
  2. Initial stabilization period at Khavda led to some generation loss, impacting Q3 profitability.
  3. Delays in thermal project awards like Meja due to equity threshold approvals and Lara due to extension requests.
  4. Fixed cost under-recoveries stood at INR454 crores till December 2025, though efforts are being made to reduce it.

Good To Know

  1. NTPC commissioned India's first MWh scale long-duration energy storage system (3-MWh vanadium redox flow battery).
  2. MSCI ESG ratings upgraded NTPC to a B from CCC, reflecting improved sustainability initiatives.
  3. CERC's draft regulation allowing battery energy storage at thermal stations is a positive development.
  4. Distribution companies reported an overall profit of INR2,700 crores in FY25, improving payment security.
  5. NTPC declared a second interim dividend of INR2.75 per equity share for FY25-26.

Key Drivers

  1. Strong power demand growth.
  2. Significant capacity additions across segments.
  3. Nuclear power expansion via SHANTI Act.
  4. Improved DISCOM financial health.

Key Analyst Discussions

Competitive Environment

  1. Analyst questioned NTPC's decision not to participate in Section 63 tenders for greenfield thermal projects.
  2. Management stated a focus on Section 62 brownfield projects and evaluating Section 63 strategy later.
  3. Analyst asked about the reasons for states preferring Section 63 tenders.

Financial Highlights

  1. Analyst inquired about the loss contribution from JVs in NTPC Green in Q3.
  2. Analyst asked for quantification of the profitability increase in the fertilizer JV, driven by sales volume, gas under-recovery, and trading margin.
  3. Management clarified fixed cost under-recoveries and operational gains for 9 months FY26.

Product Composition

  1. Analyst asked for revised capacity addition targets for NTPC Green at consolidated and JV levels.
  2. Analyst sought clarification on the percentage of PPA-tied capacity for NGEL's total contracted capacity.
  3. Analyst inquired about the timelines for thermal capacity additions for the current and next two financial years.
  4. Analyst asked about the impact of curtailment on renewable generation in Rajasthan and Gujarat.

Strategic Considerations

  1. Analyst questioned the status of remaining UPPCL bids and PPA progress for thermal projects.
  2. Analyst asked about the confidence level for commissioning 2.5 GW in the next two months for NGEL.
  3. Analyst inquired about technology partnerships for future nuclear projects, specifically international vs. domestic tie-ups.
  4. Analyst asked about the expected award timelines for Meja and Lara thermal projects.
NTPC Ltd (NTPC) Concall Report Analysis & Insights | Dhanarthi