Synopsis:
India’s power sector is witnessing strong profitability, with companies like Power Grid, NHPC, Orient Green Power, and ACME Solar demonstrating high net profit margins and efficient operations. Their strong financial performance and robust growth prospects make them attractive to investors.
Power sector companies with high net profit margins stand out for their strong profitability and efficient operations. These stocks typically benefit from stable demand, effective cost management, and strategic investments in generation, transmission, and renewable energy, making them attractive to investors seeking steady returns in a capital-intensive industry.
What is Net Profit Margin and why is it important?
Net Profit Margin (NPM) is a financial metric that measures the percentage of revenue a company retains as profit after all expenses, taxes, and interest are deducted. It is calculated by dividing net profit by total revenue and multiplying by 100. Essentially, it shows how efficiently a company converts its sales into actual profit, reflecting its overall financial health and operational efficiency.
Importance of Net Profit Margin: NPM is crucial for investors and management as it indicates profitability and cost management effectiveness. A higher margin suggests the company is earning more from each unit of revenue, making it more resilient to market fluctuations and better positioned for growth. It also helps in comparing performance across companies and sectors, guiding investment and strategic decisions.
Below are a list of power stocks with high NPM
1. Power Grid Corporation of India Ltd
Power Grid Corporation of India Limited, incorporated in 1989 and based in Gurugram, is a leading power transmission utility in India and abroad. It operates in transmission, telecom, and consultancy services, managing over 180,000 circuit kilometers of transmission lines and 282 substations with 551,961 MVA capacity.
The company provides telecom services via its POWERTEL network, consultancy in planning, engineering, project management, and smart grid solutions, and operates EV charging stations, solar power, green hydrogen, and data centers.
Power Grid Corporation of India Ltd has a market value of Rs. 2,62,370.03 crore and closed at Rs. 282.10 on Friday down by 0.79 percent from its previous day closing price of Rs. 284.35.
In Q1FY26, the company reported revenue of Rs. 11,196 cr, up 1.7 percent YoY from Rs. 11,006 cr in Q1FY25 but down 8.8 percent QoQ from Rs. 12,275 cr in Q4FY25. Operating profit declined 4.6 percent YoY to Rs. 9,102 cr from Rs. 9,540 cr and fell 10.7 percent QoQ from Rs. 10,194 cr in Q4FY25, indicating margin pressure despite modest revenue growth.
The company’s net profit declined by 2.5 percent YoY to Rs. 3,631 cr from Rs. 3,724 cr and 12.36 percent QoQ from Rs. 4,143 cr. In Q1 FY26, the company earned a net profit margin of 32.43 percent, showing strong earnings and efficient operations.
2. NHPC Ltd
NHPC Limited, incorporated in 1975 and based in Faridabad, generates, sells, and trades electricity from hydro, wind, and solar power projects in India and Nepal. It also provides construction, consultancy, and maintenance services for power plants and rural infrastructure, serving bulk customers such as state-owned and private electricity utilities.
NHPC Ltd has a market value of Rs. 84,056.85 crore and closed at Rs. 83.68 on Friday down by 3.18 percent from its previous day closing price of Rs. 86.43. The ROCE of 7.42 percent, ROE of 7.53 percent, and D/E ratio at 1, indicates the company’s strong financial position.
In Q1FY26, the company reported revenue of Rs. 3,214 cr, marking a 19.3 percent increase YoY from Rs. 2,694 cr in Q1FY25 and a 37 percent rise QoQ from Rs. 2,347 cr in Q4FY25, driven by strong demand across its segments.
Operating profit grew 12 percent YoY to Rs. 1,802 cr from Rs. 1,609 cr and surged 65.3 percent QoQ from Rs. 1,090 cr, while net profit rose 2.6 percent YoY to Rs. 1,131 cr from Rs. 1,102 cr and 22.9 percent QoQ from Rs. 920 cr, reflecting improved margins and operational efficiency.In Q1 FY26, the company earned a net profit of Rs. 1,131 crore, with a net profit margin of 35.19 percent, showing strong earnings and efficient operations.
3. Orient Green Power Company Ltd
Orient Green Power Company Limited, incorporated in 2006 and based in Chennai, is an independent renewable power producer. It develops, owns, and operates a diversified portfolio of wind energy plants in India and Croatia, with a total installed capacity of 402.3 MW as of March 31, 2025.
With a market valuation of Rs. 1,557.79 crore, Orient Green Power Company Ltd closed at Rs. 13.28 on Friday, down by 1.85 percent from its previous day closing price of Rs. 13.53. With ROE of 3.84 percent, ROCE of 6.65 percent and debt to equity ratio of 0.51, highlights the company’s financial position.
In Q1FY26, the company reported revenue of Rs. 87 cr, up 38.1 percent YoY from Rs. 63 cr in Q1FY25 and 112.2 percent QoQ from Rs. 41 cr in Q4FY25, driven by strong business recovery.
Operating profit rose 46.3 percent YoY to Rs. 60 cr from Rs. 41 cr and 275 percent QoQ from Rs. 16 cr, while net profit increased 383.3 percent YoY to Rs. 29 cr from Rs. 6 cr and turnaround QoQ from a loss of Rs. 15 cr, reflecting significant margin improvement and operational turnaround. In Q1 FY26, the company earned a net profit of Rs. 29 crore, with a net profit margin of 33.33 percent, showing strong earnings and efficient operations.
4. ACME Solar Holdings Ltd
ACME Solar Holdings Limited, founded in 2003 and based in Gurugram, is a subsidiary of ACME Cleantech Solutions Limited and a leading solar independent power producer in India. The company develops, owns, and operates utility-scale solar projects with 2,540 MW capacity and has 3,780 MW under development. It also engages in wind and hybrid power generation and provides EPC and operation & maintenance services, primarily serving government-backed entities.
With a market valuation of Rs. 16,137.69 crore, ACME Solar Holdings Ltd closed at Rs. 266.70 on Friday, down by 5 percent from its previous day closing price of Rs. 280.85. It has an ROE of 7.57 percent, ROCE of 8.42, and D/E ratio at 2.43, indicating the company’s financial position.
In Q1FY26, the company posted revenue of Rs. 511 cr, up 64.8 percent YoY from Rs. 310 cr in Q1FY25 and 4.9 percent QoQ from Rs. 487 cr in Q4FY25, reflecting robust sales growth across its segments.
Operating profit rose 68.4 percent YoY to Rs. 458 cr from Rs. 272 cr and 5.0 percent QoQ from Rs. 436 cr, while net profit surged to Rs. 131 cr from Rs. 1 cr YoY and 7.4 percent QoQ from Rs. 122 cr, highlighting strong margin expansion and operational efficiency. In Q1 FY26, the company earned a net profit of Rs. 131 crore, with a net profit margin of 25.63 percent, showing strong earnings and efficient operations.
Written by Akshay Sanghavi
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