Reliance Power Q4 FY26 Results (NSE: RPOWER)
Signal: Slipped to loss
The read
Q4FY26 headline loss of ₹494 Cr driven entirely by a one-off impairment of ₹382 Cr at subsidiary RSTEPL. Underlying operations showed a marginal OPM expansion to 31% (120bps YoY) on lower other expenses, but revenue remained flat. The group continues to face significant subsidiary-level distress (RSTEPL default, SMPL debt dispute, DSPL going concern qualification) and regulatory investigations (ED attachment, SECI bank guarantee case). Net debt reduced slightly to ₹13,107 Cr, but finance costs remained elevated. Excluding exceptionals, the quarter would have been near break-even. The near-term trajectory hinges on asset monetisation (SMPL equipment sale) and resolution of legal uncertainties.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,887.26 Cr | -4.6% | 0.8% |
| EBIT | ₹576.29 Cr | -2.3% | |
| Net profit | ₹-494 Cr | -493.6% | |
| EPS | ₹-1.19 | -481.5% | |
| EBIT margin | 31% |
P&L walk
Revenue flat YoY; OPM expanded 120bps to 31% as generation and admin expenses fell sharply; gross margin contracted 460bps due to higher fuel cost as % of revenue, but lower other opex offset; exceptional impairment of ₹38,160 lakhs at RSTEPL and higher finance cost (+19% YoY) drove net loss; no tax benefit on impairment.
Key positives
- OPM expanded 120bps YoY to 31% (5th consecutive quarter of year-on-year OPM expansion, per prior series).
- Net debt reduced 7.6% to ₹13,107 Cr from ₹14,180 Cr in FY25.
- Operating cash flow remained positive at ₹2,824 Cr despite net loss.
- Trade receivable days improved from 73.3 to 62.8 days.
- Board approved enabling resolutions to raise up to ₹9,000 Cr through equity and NCDs for future deleveraging / growth.
Key concerns
- Net loss of ₹494 Cr in Q4, primarily due to ₹382 Cr one-off impairment at RSTEPL.
- RSTEPL defaulted on loans, technology failure, and auditor qualification – material uncertainty on going concern.
- SMPL continues in dispute with lenders; CIRP petition filed against parent post year-end; arbitration ongoing.
- ED has provisionally attached 'Reliance Centre' and wind power assets; adjudicating authority confirmed attachment.
- Fuel cost as % of revenue increased to 50.6% from 46.0% a year ago, despite lower generation expenses.
- Finance costs rose 19% YoY to ₹474 Cr, indicating no immediate relief from high debt servicing.
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