ADANIPOWER - Adani Power Limited Share Price

In the Q4 FY26 earnings conference call, management of Adani Power Limited provided an optimistic outlook supported by key financial metrics and strategic initiatives. For FY26, the company achieved a significant milestone by generating 105 billion units of power, despite a modest growth in power demand of only 0.8%. EBITDA for the full year reached INR 23,431 crores, with a strong fourth-quarter EBITDA of INR 6,498 crores, reflecting a 27% year-over-year growth. Profit after tax was reported at INR 12,971 crores for the fiscal year, demonstrating resilience amid market volatility.

Looking ahead, management emphasized expectations of robust power demand growth in FY27, driven by peak demand projected to exceed 256 gigawatts. They anticipate higher PPA offtake and strong bilateral demand in the coming year. The company is advancing its capacity expansion program, aiming to add 23.7 gigawatts of thermal capacity by 2032, with 13.3 gigawatts already tied under long-term power purchase agreements.

Specific forward-looking points include:

1. Successful acquisition of a 1,600-megawatt PPA from Maharashtra DISCOM, bringing total tied-up capacity to 13.3 gigawatts.
2. Ongoing projects like Mahan Phase-II (86% completed) and Korba Phase-II (expected commissioning within the current year).
3. A projected capex of approximately INR 25,000 crores for FY26-27 and INR 33,000 crores for FY27-28.
4. Continuous commitments to evaluate investments in thermal, hydro, and transmission sectors, and an emerging focus on nuclear power, with SPV establishment for a 570-megawatt hydro project in Bhutan.

Management reiterated their confidence in achieving established capacity and earnings growth targets while maintaining a conservative capital allocation strategy.

Q&A Section of the Adani Power Earnings Call Transcript

Question 1: Can you help us with the detailed contours of RE RTC, the 2.5-GW MSEDCL contract? If possible, can you also share the tariffs?
Answer: The capacity signed with Maharashtra is not solely for Adani Power; it involves various group products. This PPA aims to create suitable products for customer needs through a trading platform. The arrangement will include coal, wind, solar, and battery capacities.

Question 2: Regarding merchant power, how is it defined, and how much of the capacity is under medium term? Is there potential conversion to long-term?
Answer: Currently, merchant capacity is 5%, reflecting units not tied to medium or long-term PPAs. The capacity fluctuated from 16% earlier. As of now, about 1,000 MW on an RTC basis is merchant capacity fed by our open capacity throughout the year.

Question 3: What capacities are expected to be commissioned in FY27-28? What is the capex plan for those years?
Answer: For FY26-27, we plan to add 1.32 GW at Korba with a capex of about INR 25,000 crores. For FY27-28, the capex will be near INR 33,000 crores, with 1.6 GW capacity addition.

Question 4: When should we expect the commissioning of Korba and Mahan? Also, what will be their EBITDA contributions?
Answer: Korba will be commissioned between June and September; Mahan's first unit might be in the last quarter of the current year or early next year. Korba's EBITDA contribution could be around INR 1,000 crores.

Question 5: What is the update on the Bangladesh Power Development Board receivable collection?
Answer: Outstanding amounts have reduced significantly, and we are receiving regular payments from Bangladesh. An expert has been appointed to resolve disputes, and we can pursue arbitration if necessary based on their opinion.

Question 6: On the 1,600-megawatt PPA with MSEDCL, which project will this be assigned to, and what are the tariff details?
Answer: We haven't assigned the project yet, but possibilities include Raigarh, Raipur, or Korba. The tariff is INR 5.30/unit, including INR 4.11 as capacity charge and INR 1.19 as energy charge.

Question 7: Can you elaborate on your nuclear plan? Are you focused solely on small modular reactors?
Answer: We are currently waiting for the government to notify rules regarding nuclear projects. We're preparing by identifying sites and seeking necessary approvals, but the specifics depend on future government regulations.

Question 8: What is the timeline for starting the 1,600-megawatt Maharashtra PPA?
Answer: The PPA is yet to be signed, but we expect this within three months of submitting the tariff adoption application. The commissioning would take about 48 months from that point.

Question 9: How insulated is Adani Power from ongoing coal shortages?
Answer: Currently, we don't face coal shortages as domestic production is sufficient. Imported coal prices have been affected by geopolitical events, but this impact is mitigated as these costs are passed through to tariffs.

Question 10: When can we expect an operational cash flow of INR 50,000 crores?
Answer: Conservatively, we aim to achieve INR 50,000 crores by FY2031, or possibly by FY2030 if operations proceed as planned without disruptions.

These responses convey a comprehensive perspective on Adani Power's financial strategies, project timelines, and market positioning following their Q4 FY26 earnings call.