Adani Power Q3 FY26 Results: Concall Red Flags

Category	Target	Timeline	Priority
Capacity Expansion	Total capacity target 42 GW (18.15 existing + ~24 GW new)	FY31-32	High
Capacity Expansion	Commissioning schedule FY27 2.9 GW (Korba Phase II 2x660 MW + others)	FY27	High
Capacity Expansion	Commissioning schedule FY28 2.4 GW	FY28	High
Revenue Strategy	Merchant exposure reduction From 10% to 3-4%	Over 6-7 years	Medium
Capital Expenditure	Total expansion capex INR 2 lakh crores (~USD 22 billion)	Over 5-6 years	High
Financial	Annual FFO from operating assets INR 20,000 crores	Annual (current)	High

Risk	Severity
Declining merchant power prices due to extended monsoons and higher renewable generation Merchant realization fell from INR 4.56 to INR 4.37/kWh QoQ; 9M from INR 6.16 to INR 5.44/kWh — Management acknowledged	medium
Bangladesh geopolitical risk affecting Godda plant Plant supplies ~10% of Bangladesh effective capacity; earns ~$1B for India annually — Analyst acknowledged	medium
Rajasthan 3,200 MW PPA regulatory delay Regulator questioned whether full 3,200 MW is needed based on resource adequacy plans — Analyst acknowledged	medium
Massive INR 2 lakh crores capex program execution risk INR 60,000 crores funding gap to be bridged from capital markets; debt has increased — Analyst acknowledged	medium
Increasing renewable energy penetration reducing thermal dispatch Management expects 380-400 GW peak capacity requirement by FY32 to sustain thermal demand — Analyst acknowledged	low

Detailed Narrative

Strategic Shift to Contracted Revenue Model

Adani Power has systematically reduced merchant exposure from 80-20 (PPA-merchant) two years ago to 90-10 now, with plans to reach 96-97% PPA-tied. This is the defining strategic shift - new 24 GW capacity will earn 100% EBITDA from capacity charges (fuel is pass-through), making the business model effectively a capacity availability play rather than energy merchant play. The new PPAs have significantly higher capacity charges than legacy PPAs, which will drive per-MW EBITDA improvement.

Massive Expansion Program on Track

The 23.7 GW expansion program is progressing well: Mahan Phase II at 80%, Raipur Phase II at 44%, Raigarh Phase II at 38%. Korba Phase II (acquired in defunct state) has been revived with first unit expected mid-FY27. The commissioning schedule: FY27 2.9 GW, FY28 2.4 GW, FY29 2.4 GW, FY30 8 GW, FY31 5.6 GW, FY32 2.4 GW. Half of upcoming capacity already has LOAs/PPAs. The company is bidding for 15 GW of ongoing tenders to fill the remaining 12 GW.

PPA Pipeline and New Awards

Key new PPAs: Assam 3,200 MW at INR 6.30/kWh (INR 4.16 capacity charge), Karnataka 570.5 MW at INR 5.78/unit (INR 4.50 fixed), Uttarakhand 370 MW medium-term at INR 5.85/kWh (50-50 split). The Rajasthan 3,200 MW PPA faces a regulatory hiccup but is expected to proceed. Maharashtra financial bidding done. Multiple states expected to come up with long-term thermal PPA bids.

Godda/Bangladesh Operations

Godda Q3 revenue INR 2,210 crores, EBITDA INR 1,092 crores. PLF improved significantly from 50% to 68% YoY. However, EBITDA declined ~INR 130 crores YoY due to lower coal indices (HBA $104/t vs $123/t). Payments are regular with ~2 months outstanding. New government policy now permits domestic commercially-mined coal for cross-border power export, potentially improving fuel economics.

Adani Power

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