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Informist, Friday, Feb. 7, 2025

By Anand JC

MUMBAI – A pointed increase in total expenses driven by staff costs for the December quarter owing to two disputes dragged down NHPC Ltd.'s net profit by double-digits. However, in the reporting quarter, its revenue from operations grew at the fastest rate year-on-year in the last two years.

The increase in employee costs was because of a matter relating to pay and arrears in the Punjab and Haryana High Court. The company received an order from this court, as per which, arrears payable to employees were estimated at INR 5.35 billion. The company capitalised INR 1.62 billion and charged INR 3.73 billion to its profit and loss statement during the quarter. Out of this amount transferred to the profit and loss statement, INR 1.08 billion has been recognised as unbilled revenue, which is recoverable from beneficiaries. This has caused a reduction in the company's net profit by INR 1.98 billion, the company said.

Additionally, the company provided for INR 15.32 billion during the quarter-ended December in a matter relating to disputed claims. Out of this amount, the company capitalised INR 9.79 billion, the principal, and charged the balance INR 5.53 billion, the interest, to the profit and loss statement. Out of the interest component, INR 4.16 billion has been recognised as unbilled revenue. This caused the bottom line of NHPC to be lower by INR 1.03 billion for the quarter. 

NHPC reported a net profit of INR 2.74 billion for the reporting quarter, 50% lower than the year-ago quarter and 70% lower sequentially. Analysts were expecting a net profit in the range of INR 5.91 billion and INR 7.11 billion. 

The state-run company's revenue from operations for the December quarter was INR 19.70 billion, 16% higher than the year-ago quarter but 22% lower sequentially. Other income for the period was INR 4.55 billion, just over 26% lower year-on-year. 

The total expenses of NHPC for the December quarter was INR 21.11 billion, 29% higher compared to the corresponding quarter a year-ago. This sharp increase was mainly due to an acute increase in its finance costs and staff costs for the reporting quarter. 

NHPC's generation expenses fell 30% on year to INR 1.03 billion. However, its employee benefits expenses more than doubled to INR 6.52 billion for the December quarter from INR 3.07 billion last year. Similarly, its finance costs increased by an even higher quantum to INR 6.51 billion from INR 1.32 billion in the same quarter a year ago. 

The company's other expenses fell to INR 4.26 billion for the December quarter, down 45% year on year. Its tax expenses for the quarter, too, contracted to INR 648 million from INR 1.57 billion a year ago. 

The operating margin of NHPC for the latest quarter was 28.47%, down from 47.48% a quarter ago but higher than 14.20% in the December quarter of 2023. Its net profit margin for the reporting quarter was 13.89%, much lower than the 32% in the base quarter.

For Apr-Dec, NHPC's net profit was INR 21.90 billion, down 28% on year, and revenue from operations was INR 69.36 billion, just 3% higher year-on-year.

NHPC's board has approved an interim dividend of INR 1.40. The record date for this payment is Thursday. The company detailed its financials for the December quarter after the markets closed. On Friday, its shares closed at INR 77.43 on the National Stock Exchange, down 0.2%.  End

Edited by Akul Nishant Akhoury

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