ADANIPOWER - Adani Power Limited Share Price

In the Q1 FY26 earnings call held on August 1, 2025, Adani Power management, led by CEO S.B. Khyalia, provided an optimistic outlook regarding the power sector and the company's growth trajectory. The management highlighted that India's economic growth prospects align with a robust demand for power, anticipating additional capacity requirements to increase from 80 GW to 95 GW.

Key points include:

1. Capacity Expansion: Adani Power has acquired Vidarbha Industries Power Ltd., contributing 600 MW to its portfolio. An expansion of 12,520 MW is planned by 2030, with 4,800 MW already in progress. The ongoing Phase-II projects at Mahan and Raipur have progressed to 66% and 25% execution, respectively.

2. Power Supply and Demand: In Q1 FY26, despite a 1.6% decline in all-India demand, Adani Power supplied 1.6% more power (24.6 billion units) compared to Q1 FY25, demonstrating its resilient operational capability.

3. Financial Performance: The company reported total revenue of Rs.14,167 crores, EBITDA of Rs.5,744 crores, and a profit after tax of Rs.3,305 crores. Operating expenses were elevated due to integration costs from recent acquisitions, but management's focus on operational efficiency remains strong.

4. Long-term Contracts: A recent long-term PPA with Uttar Pradesh Discom was signed for 1,600 MW gross capacity, enhancing the company's pipeline of secured contracts to 4,520 MW.

5. Debt and Cash Flow Management: As of June 30, 2025, total debt was Rs.44,372 crores, with a net debt position of Rs.37,437 crores. Management remains committed to debt-light growth funded through internal cash flows, and plans to ensure liquidity without relying heavily on external borrowings for upcoming projects.

Overall, Adani Power remains optimistic about its strategic positioning to capitalize on the expected thermal power demand increase and aims to navigate through current market challenges effectively.

Key Questions and Answers from the Q&A Section

1. Question: The company has given an order of about INR 65 billion to BHEL. What does it exactly entail given that all our equipment is already being tied up for the upcoming capacities?
Answer: The order aligns with our evaluation for expansion considering the demand for 80 GW of thermal power. We're exploring various opportunities, and I'll share concrete numbers as planning progresses.

2. Question: How have operations been for the recently acquired Coastal, Lanco, and Vidarbha assets? Are there challenges or expected EBITDA?
Answer: Lanco Amarkantak has minor ash disposal issues, while Coastal is undergoing an overhaul and expected to normalize soon. Vidarbha was in shutdown but is now operational. EBITDA expectations will depend on upcoming performance evaluations.

3. Question: What was the merchant realization in Q1, and what is the outlook?
Answer: Merchant realization was Rs. 6.51 per kWh, down from Rs. 7.60 year-on-year. Due to early monsoon, demand was sluggish; however, we expect a better second quarter based on weather trends and refreshed demand.

4. Question: With the recent ruling on FGD, does that change our CAPEX estimates for under-construction projects?
Answer: Yes, the recent notification allows us to drop FGD expenditures for projects not yet under execution. We've decided to continue with two projects already in advanced stages, which will reduce overall project costs.

5. Question: What is the status of pending validations and final settlements regarding alternate coal compensation from Haryana discom?
Answer: Discussions are ongoing, with Haryana paying 50% of the bill differences we've raised. We anticipate resolution shortly as we continue to account for these partial payments.

6. Question: What is the current total of regulatory receivables outstanding, and how much is under dispute?
Answer: There's minimal pending regulatory receivables, mainly due to routine claims. Most significant claims are resolved, so they won't substantially impact revenue or profitability.

7. Question: What about debt repayments made this quarter?
Answer: We've repaid Rs. 2,579 crores of principal and Rs. 1,146 crores in distributions. All outstanding amounts have now been cleared, including the July payments.

8. Question: What is the expected commissioning date for the Dhirauli mine?
Answer: We anticipate production to start by September or October, aligning with our initial project timelines.

9. Question: Could you elaborate on the tariffs of the PPA signed with UPPCL?
Answer: The PPA includes a capacity charge of Rs. 3.73, with a total tariff of Rs. 5.39. The remaining capacity is net post-auxiliary consumption; thus, there's no additional capacity left to tie up.

10. Question: What is the anticipated debt profile going forward?
Answer: We expect internal accruals to sufficiently cover our CAPEX needs for the year, minimizing the necessity for further indebtedness on under-construction projects.