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    Adani Power

    ADANIPOWERNeutral
    Power·30 Oct 2025
    Management Summary

    Adani Power delivered stable Q2 FY26 results despite unprecedented monsoon conditions that suppressed power demand and merchant tariffs. The company grew volumes 7%+ through competitive PPAs and increased capacity. Strategic focus on long-term PPA tie-ups continued with major wins in Bihar, MP, and Karnataka, taking PPA coverage to ~91%. The massive 23.7 GW expansion is fully de-risked with 100% equipment ordering done. CEO Khyalia outlined a clear path from 18 GW to 42 GW by FY32 with earnings growth driven by high capacity charges in new PPAs.

    Highlights

    8

    • Power sales grew 7%+ to 23.7 billion units despite extended monsoon impacting demand

    • Continuing revenue at INR 13,639 crores, slightly up YoY; EBITDA at INR 5,333 crores vs INR 5,402 crores

    • PAT of INR 2,906 crores, healthy but slightly below INR 3,298 crores YoY due to higher deferred tax

    • Won PPAs: Bihar 2,400 MW, MP 1,600 MW, Karnataka 570 MW; PPA coverage now ~91%

    • L1 bidder for Assam 3,200 MW with commission approval received

    • 4 projects under construction (6,120 MW) to be commissioned FY27-FY29; 100% BTG advance-ordered for entire 23.7 GW

    • Revived 600 MW Butibori plant within 2 months of acquisition; signed 500 MW Maharashtra PPA

    • Total expansion pipeline bids at ~22 GW across multiple states

    What Changed2

    vs Q3 FY26

    Tone shiftConfidently optimistic despite weak quarter; focused on long-term capacity-charge-driven business model → Confidently bullish; CEO directly led the call with strong forward-looking statementsRisks discussed5 → 4 (-1)

    Key financials

    Single quarter

    15 metrics
    1. 01Revenue (Continuing) Q2₹13,639 Cr+1.3%YoY
    2. 02EBITDA (Continuing) Q2₹5,333 Cr-1.3%YoY
    3. 03PAT Q2₹2,906 Cr-11.9%YoY
    4. 04H1 Revenue (Continuing)₹27,807 Cr-2.5%YoY
    5. 05H1 EBITDA (Continuing)₹11,076 Cr-5.3%YoY

    Segment breakdown

    ₹1,049 Cr Revenue
    ₹677 Cr Revenue
    ₹339 Cr Revenue
    List

    Guidance & targets

    6
    CategoryTargetPriority
    Capacity Expansion
    Total capacity target
    42 GW by FY32
    		High
    Capacity Expansion
    FY27 commissioning
    ~3 GW
    		High
    Capital Expenditure
    Total expansion capex
    ~INR 2 lakh crores
    		High
    Revenue Strategy
    Merchant rate H2 expectation
    ~INR 6/unit
    		Medium
    Operations
    Godda Indian grid connection
    Connected by December 2025
    		High
    Operations
    Dhirauli mine coal production
    Box cutting by end FY26, coal production from FY27
    		High

    Risks & concerns

    4
    RiskSeverity

    Extended monsoon suppressing power demand and merchant tariffs

    PLF fell to 62.8% from 66.9% YoY; merchant realization down ~10% to INR 5.37/kWh — Management acknowledged

    medium

    Debt increase from INR 38,335 crores to INR 47,254 crores in 6 months

    Net debt at INR 36,776 crores; management emphasizes efficient capital structure — Other acknowledged

    medium

    Bangladesh/Godda geopolitical risk

    Grid connection allows selling in India if Bangladesh stops scheduling or defaults on payment — Analyst acknowledged

    medium

    Regulatory uncertainty on state-level PPA approvals

    Multiple state bids at various stages; process dependent on state decision-making — Analyst acknowledged

    low

    Q&A highlights

    4

    “Rajasthan 3,200 MW, Uttarakhand 1,320 MW, Maharashtra 1,600 MW, UP 4,000 MW, WB 2,260 MW, Karnataka 1,600 MW, Gujarat 4,000 MW, Assam 3,200 MW - total ~22,000 MW.”

    Pipeline far exceeds the ~12 GW still untied, giving company strong optionality in PPA selection

    asked by Shirom Kapur (Jefferies)

    1 min read4 chapters

    Detailed Narrative

    01

    PPA Strategy Acceleration

    The quarter saw significant PPA wins: Bihar 2,400 MW, MP 1,600 MW, Karnataka 570 MW (25-year at INR 5.78/unit), Maharashtra 500 MW (5-year medium-term at INR 5.55/unit). PPA coverage rose to ~91% (16,300 MW of 18,150 MW operating). The Assam 3,200 MW bid was won as L1 with regulatory approval. The total pipeline of state thermal bids has expanded to ~22 GW, far exceeding the ~12 GW of untied upcoming capacity.

    02

    New PPA Structure Advantage

    CEO explained the new standard bidding documents only require first-year tariff quotation. Fuel charges are 100% pass-through. Capacity charges escalate by 30% of WPI minus 1-2% reduction per year, effectively remaining flat. This eliminates the historical Mundra-type single levelized tariff risk. For new 24 GW, EBITDA is entirely driven by plant availability, not dispatch.

    03

    Execution Progress and Equipment Strategy

    Four projects under construction totaling 6,120 MW: all ahead of schedule. 100% BTG advance ordering done for entire 23.7 GW expansion (8 machines of 800 MW to L&T, balance to BHEL). Equipment delivery staggered over 38-75 months. Management confident in timeline with no expected cost overruns. Butibori 600 MW revived within 2 months of acquisition after 10 years of shutdown.

    04

    Godda Risk Mitigation

    Godda PLF at 72% (vs 73% YoY), receivables only 1.5 months outstanding. Indian grid connection expected by December 2025, providing crucial backup. Under regulations, power can be sold to Indian grid if Bangladesh stops scheduling or defaults on payment. This effectively converts Godda from a single-buyer risk to a dual-market asset.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.