1. Introduction: The “Capex Pain” Phase Nobody Likes

On January 30, 2026, the market reacted nervously to the Q3 FY26 results of NTPC Green Energy Ltd. The stock slipped by around 3–4% in early trade, hovering near the ₹88–92 zone. The reason was simple and scary at first glance: net profit collapsed by more than 70% year-on-year.

For many retail investors, a profit fall of this magnitude rings alarm bells. Social media quickly filled with questions like “Is the green story broken?” or “Did the government overhype renewable energy stocks?”

But here’s the truth most headlines miss: NTPC Green is not going through a business slowdown; it is going through a construction phase. This quarter is not about earnings optics. It is about building physical assets at record speed.

The key question is not why profits fell, but why revenues and operating profits surged at the same time. Once you understand that difference, this quarter starts to look very different.

NTPC Green Energy – Official Website

2. The Financial Scorecard: Separating Business Reality From Accounting Noise

Let us first put the numbers on the table, clearly and calmly, before jumping to conclusions.

In Q3 FY26, NTPC Green reported revenue of about ₹653 crore, which is nearly 29% higher than last year. This is strong growth by any standard, especially for a utility business where growth is usually slow and steady.

At the operating level, the performance was even better. EBITDA rose by around 34%, touching roughly ₹567 crore, and the EBITDA margin expanded to an eye-watering 86.9%. This means that for every ₹100 earned, the company retained almost ₹87 as operating profit. Very few companies in India enjoy margins of this quality.

So why did net profit collapse to just ₹17.5 crore, down more than 73% year-on-year?

The answer lies in two items that dominate infrastructure companies during expansion phases: interest cost and depreciation. NTPC Green is borrowing aggressively to build new solar and wind capacity, and those loans carry interest. At the same time, newly commissioned assets start attracting depreciation, which is a non-cash accounting expense.

In short, operations are strong, but accounting profits are suppressed.

NSE India – Corporate Filings

3. Why Net Profit Is the Wrong Metric During a Capex Cycle

One of the biggest mistakes investors make is applying the same lens to all businesses. A consumer company and an infrastructure company cannot be judged using the same quarterly profit yardstick.

NTPC Green is currently in a heavy capital expenditure phase. It is spending billions of rupees to build solar parks, wind farms, transmission links, and storage infrastructure. These assets take time to generate stable profits, but once operational, they produce predictable cash flows for 20–25 years.

During this phase, three things happen simultaneously. First, interest expenses rise because debt is being drawn down. Second, depreciation jumps as assets are capitalized. Third, revenue lags costs by a few quarters because new capacity needs time to ramp up.

This creates what looks like a “profit crash” but is actually a temporary accounting dip. Importantly, cash flows from operations remain healthy, which is why EBITDA growth matters far more than PAT at this stage.

4. Capacity Expansion: The Real Story Behind the Numbers

The most important operational metric for NTPC Green is not profit but installed renewable capacity. And here, the company is moving at full speed.

As of Q3 FY26, NTPC Green’s installed capacity stood at around 8,478 MW, up sharply from previous quarters. Just a day before the results, the company announced the commercial operation of 130 MW at the Khavda solar park in Gujarat, one of the largest renewable energy projects in the world.

This is critical because every megawatt commissioned today becomes a long-term annuity tomorrow. Power purchase agreements (PPAs) are already signed, meaning the buyer is guaranteed and payment risk is minimal.

The costs of building Khavda hit the books in Q3. The revenues from it will flow more meaningfully from Q4 onwards. This timing mismatch is exactly why profits look ugly today.

5. The EBITDA Margin Tells You the Business Is Healthy

An EBITDA margin of nearly 87% is not normal. It signals an extremely strong core business. Renewable energy, once built, has almost zero fuel cost. Sunlight and wind do not send invoices.

What this margin tells us is simple: NTPC Green’s assets are working efficiently. There is no demand issue, no pricing pressure, and no operational stress. The company is selling power smoothly and collecting revenue on time.

If the business was broken, EBITDA margins would collapse. Instead, they are expanding. That alone should reassure long-term investors that the fundamentals remain intact.

6. Khavda Solar Park: India’s Green Power Crown Jewel

The Khavda renewable energy park in Gujarat deserves special attention. Spread across a vast area near the India-Pakistan border, it is designed to be a multi-gigawatt renewable hub combining solar and wind.

NTPC Green is a major participant in this project, and each new block commissioned adds scale, visibility, and confidence. The recent 130 MW commissioning is just one step in a long pipeline.

Khavda is not just another power project. It represents India’s ambition to become a global renewable powerhouse, capable of exporting green power derivatives like green hydrogen and green ammonia in the future.

7. Depreciation: The Misunderstood Villain

Depreciation scares investors because it reduces reported profits. But depreciation does not involve any cash outflow. It is simply the spreading of asset cost over its useful life.

In fact, high depreciation can sometimes be beneficial. It reduces taxable income, lowering cash tax payments. From a cash flow perspective, this actually helps during expansion phases.

NTPC Green’s rising depreciation simply reflects the fact that new assets are getting capitalized rapidly. That is a sign of execution, not distress.

Ministry of New & Renewable Energy (MNRE)

8. India’s 2030 Renewable Pledge: NTPC Green’s Strategic Role

India has committed to achieving 500 GW of non-fossil energy capacity by 2030. This is not a slogan; it is a binding international commitment tied to climate diplomacy, trade negotiations, and energy security.

NTPC Green is the government’s primary execution arm for this transition. Unlike private developers who may slow down during market stress, NTPC Green enjoys sovereign backing, long-term policy support, and guaranteed offtake through PPAs.

Schemes like PM Suryodaya Yojana, state renewable auctions, and central government mandates ensure that NTPC Green will always find buyers for its power.

This makes it less of a cyclical stock and more of a strategic infrastructure asset.

NTPC Ltd – Investor Relations

9. Green Hydrogen and Ammonia: The Next Optionality

Beyond power generation, NTPC Green is quietly positioning itself for the next energy revolution: green hydrogen and green ammonia.

Recent collaborations, including international partnerships with Japanese and European firms, signal a long-term shift from just selling electricity to exporting clean fuels.

This optionality is not reflected in current earnings. It is a free call option on India’s future energy exports, especially to energy-hungry regions like Europe and East Asia.

10. The Interest Cost Risk: A Legitimate Concern

To be fair, not everything is perfect. The biggest near-term risk is interest rate sensitivity. NTPC Green carries significant debt to fund its expansion. If interest rates stay elevated for longer than expected, finance costs will continue to pressure net profits.

However, this risk is mitigated by NTPC’s strong balance sheet, access to low-cost sovereign-linked funding, and the likelihood of rate easing once inflation stabilizes.

This is a timing risk, not a structural one.

11. Execution Risk: The Real Test Ahead

The second risk is execution. Renewable projects involve land acquisition, grid connectivity, and regulatory approvals. Any delay means interest costs keep accumulating while revenue is postponed.

So far, NTPC Green’s execution record has been solid. But investors must track commissioning timelines carefully, quarter by quarter.

12. Market Psychology: Why Prices Fall Despite Good Long-Term News

Markets hate uncertainty and love clean numbers. A 73% profit fall, even if explained, triggers emotional selling. Many traders do not read beyond headlines.

This creates what long-term investors should welcome: temporary mispricing. History shows that infrastructure stocks often underperform during build-out phases and outperform once cash flows stabilize.

13. Valuation Perspective: Thinking in Decades, Not Quarters

NTPC Green should not be valued like a fast-moving consumer stock. It should be valued like an infrastructure platform with 20–30 year cash flows.

Short-term profit volatility is the entry fee. Long-term stability is the reward.

As capacity scales and interest costs peak, the same operating leverage that hurts profits today will amplify them tomorrow.

14. Conclusion: The Verdict for Long-Term Investors

The Q3 FY26 results of NTPC Green look ugly only if you stop at net profit. If you dig deeper, they tell a very different story.

Revenue is growing strongly. EBITDA is rising even faster. Margins are world-class. Capacity is expanding at record speed. Policy support is iron-clad.

This is not a broken green story. This is a green engine under construction.

Final Verdict: ACCUMULATE FOR 2030

This stock is not for short-term traders chasing clean quarterly numbers. It is for patient investors who understand infrastructure cycles and are willing to look beyond temporary accounting pain.

As India builds its green future, NTPC Green is laying the foundation. The noise will fade. The assets will remain.

❓ FAQ

Q1. Why did NTPC Green’s profit fall sharply in Q3 FY26?

NTPC Green’s profit fell mainly due to higher interest costs and depreciation from new renewable projects. These are capex-related expenses, not a sign of weak business performance.

Q2. Is NTPC Green’s business still strong despite the profit drop?

Yes. Revenue grew 29% and EBITDA rose 34%, showing that core operations and cash generation remain strong.

Q3. What is NTPC Green’s installed renewable capacity now?

As of Q3 FY26, NTPC Green’s installed capacity stands at around 8,478 MW, with more projects set to be commissioned.

Q4. Why is EBITDA more important than net profit for NTPC Green right now?

During heavy expansion phases, EBITDA reflects operational strength, while net profit is temporarily reduced by interest and depreciation.

Q5. Is NTPC Green a long-term investment?

NTPC Green is considered a long-term renewable infrastructure play aligned with India’s 2030 clean energy targets, suitable for patient investors.