The consolidated net profit of Adani Power in Q2 FY24 increased by an astounding 848% to ₹6,594 crore from ₹696 crores during the corresponding period in 2022. This was primarily due to a spike in power demand and favourable tax adjustments that resulted in a tax gain of ₹1,371 crores. The arid weather, decreased hydroelectric output, and increased economic activity were blamed for the spike in power demand.
Plant Load Factor (PLF) raised by the company on average from 39.2% to 58.3%, which led to a 65% increase in power sales volume to 18.1 billion units (BU). As a result, operational revenue increased by 84.4% to ₹12,991 crore, even though overall expenses increased by 25.4%, primarily because of rising fuel costs. The company’s stock has increased by 25%, reaching a high of ₹389.50 on the BSE, close to its 52-week high of ₹409.70.
Despite the controversy surrounding Adani shares overleveraged, the company’s BSE share price increased by almost 7% after these results. The quarter’s EBITDA of ₹4,336 crores (INR100 crore = approximately USD12 million) was primarily attributable to lower fuel costs and higher merchant tariffs, with a 202% increase from Q2FY23.
The Adani Group revealed the total amount of power sales for Q2 of FY24
The company also revealed that, compared to 11 BU in Q2 FY23, its consolidated power sale volume for Q2 FY24 increased by 65% to 18.1 BU. Increased operating capacity and higher power demand were the driving forces behind this growth. APL’s consolidated continuing total revenue for Q2 FY24 was ₹12,155 crores, up 61% from Q2 FY23’s ₹7,534 crores. Increased sales volumes were the primary factor driving the increase. During the same period, the continuing EBITDA was ₹4,336 crores, a significant 202% increase from ₹1,438 crores in Q2 FY23.
This increase is ascribed to lower fuel prices, higher merchant tariffs, and higher sales volumes despite the controversy surrounding Adani shares overleveraged issue. APL’s consolidated PAT increased from ₹5,475 crores in H1 FY23 to ₹15,354 crores in the first half of FY24, a 180% increase. Compact power sales volume for H1 FY24 was 35.6 BU, up 30% from H1 FY23’s 27.3 BU.
Contributors to the increase in power sales
With a 202% increase from Q2FY23, the quarter’s EBITDA of ₹4,336 crores (INR100 crore = approximately USD12 million) was primarily attributable to lower fuel costs and higher merchant tariffs. Increased merchant sales, the Godda power plant, and larger sales volumes are some of the factors that contributed to this spike. Through authorized regulatory procedures, lower import coal prices also improved Power Purchase Agreements (PPAs) at the Mundra and Udupi plants.
Adani Power has an installed thermal power capacity of 15,210 MW spread among eight power plants in India and a 40 MW solar power plant in Gujarat. The company has considerable power uptake in the Mundra, Udupi, Raipur, and Mahan plants. Real-time data shows that Adani Power has been producing a high rate of return on capital invested, which is consistent with the company’s remarkable increase in net profit in the second quarter of FY24.
This is further verified by the business’s impressive earnings, which should permit management to carry on with dividend payments even though the company has not historically distributed dividends to shareholders. Adani Power has also experienced a strong return over the last three months, consistent with the 25% increase in the company’s shares, and is currently trading at a low earnings multiple.
This makes it a desirable choice for investors searching for lucrative opportunities in the Independent Power and Renewable Electricity Producers sector, of which Adani Power is a significant player. This demonstrates that the Group has been charged with having three times the appropriate amount of debt, and Adani shares overleveraged controversy.
The business’s operating revenue increased significantly as well
A significant rise was also seen in the company’s operating revenue, which came in at Rs. 12,990.58 crore, up 84.42% from Rs. 7,043.77 crore during the same period the previous year. It’s important to note that the income figure includes one-time adjustments for a Rs. 1,125 crore shortage in domestic coal. Increased sales volumes, contributions from the Godda power plant, and higher merchant sales are some of the reasons for the revenue growth.
According to Adani Power, the Mundra and Udupi facilities’ power off-take under import coal-based Power Purchase Agreements (PPAs) was significantly increased by the company’s ability to capitalize on falling import coal costs. Under these agreements, tariffs are set via authorized regulatory procedures that monitor global coal prices. The company reported other income of Rs. 1,945 crore in addition to its operating revenue during the quarter. This includes one-time adjustments for items from previous periods, significantly Rs. 1,656 crore for carrying expenses, and penalties for late payments.
In the wake of this profitable performance, even when the group faced Adani shares overleveraged controversy, the company’s share price surged by almost 7%, hitting Rs. 390.40 on the BSE.
