On November 2, 2023, Adani Power Ltd. released stunning financial results for the second quarter of the current fiscal year, 2023–24 (Q2 FY24). Consolidated net profit for the company during the September quarter was Rs. 6,594 crores, up 847.41 per cent from Rs. 696 crores during the same period last year. In Q2 FY24, revenue from operations increased to Rs. 12,991 crores, an 84.43 per cent increase from Rs. 7,044 crores in the same period in 2022, even with the ongoing Adani case.
EBITDA (earnings before interest, taxes, depreciation, and amortization) increased by 202% to Rs. 4,336 crores in Q2 FY24 from Rs. 1,438 crores in Q2 FY23, the business reported. This increase was primarily due to lower fuel costs, higher merchant tariffs, and the addition of the Godda power plant. However, because of the Godda plant’s commissioning, the depreciation charge for Q2 FY24 climbed to Rs. 1,004 crores from Rs. 833 crores in Q2 FY23.
The Godda plant borrowing expenses were the primary cause of the increase in finance costs for Q2 FY24, which went from Rs. 818 crores to Rs. 888 crores during the same time in 2022.
Adani Power Claims Higher Sales Volume
The company said that because of the shortage of local coal, it includes one-time prior period charges of Rs. 1,125 crores. Adani Power claims that notwithstanding the Adani case, higher sales volumes—including the Godda power plant’s contribution and more extensive merchant sales—were the cause of this revenue gain. Lower import coal prices contributed to higher power offtakes under the Mundra and Udupi plants’ import coal-based Power Purchase Agreements (PPAs).
Under these PPAs, tariffs are set per authorised regulatory procedures and follow global coal prices. For the quarter, the company also declared other income of Rs. 1,945 crores, which includes one-time prior period items of Rs. 1,656 crores in the form of late payment surcharge and carrying cost. After the announcement, the company’s share price on the BSE (Bombay Stock Exchange) increased by almost 7% to Rs. 390.40.
APL and its subsidiaries achieved an average Plant Load Factor (PLF) of 58.3 per cent and a power sales volume of 18.1 billion units (BU) in Q2FY24, according to Adani Power. This compares to PLF of 39.2 per cent and power sales volume of 11 BU in Q2 FY 2022–2023 due to higher operating capacity and improved power demand. In Q2FY24, continuing EBITDA was Rs. 4,336 crores, up 202% from Rs. 1,438 crores in Q2FY23.
This increase was primarily due to lower fuel costs, higher merchant tariffs, and the addition of the Godda Power Plant.
Adani Power Q2 FY24 Earnings Highlights (YoY)
Income increased by 84.4% to Rs. 12,991 crores from Rs. 7,044 crores. EBITDA increased by 445.6% to Rs. 5,171 crores from Rs. 948 crores. 39.8% margin compared to 13.45% Profit was reported at Rs. 6,594 crores as opposed to Rs. 696 crores. The corporation and its subsidiaries had an average plant load factor of 58.3% and power sales volume of 18.1 billion units, compared to a year ago when PLF was 39.2% and power sales volume was 11 BU.
The 1,600 MW Godda ultra-supercritical power plant, which went into service in the first quarter, was included in the operating performance. Aside from the Godda power plant’s incremental contribution, the company stated that higher merchant sales and increased power offtake from the Mundra, Udupi, Raipur, and Mahan plants drove the performance in the second quarter. Lower import coal prices increased power offtake under the Mundra and Udupi facilities’ import coal-based power purchase agreements.
Due to a shortage of domestic coal, there was a gain of Rs. 1,125 crores in the operating revenue during the second quarter. In contrast, the income from the year 2022 had a Rs. 912 crores one-time gain from the previous period. Adani Power shares were up 3.27% at Rs. 376.95 a piece on the BSE, compared to a 0.64% increase in the benchmark Sensex at 2.46 p.m., suggesting that the Adani case controversy did not affect the company’s stock price.
Conclusion
The Q2 FY24 statistics of Adani Power demonstrated a remarkable increase in terms of sales, EBITDA, and profit. The commissioning of the Godda power plant and increased merchant sales improved the company’s operating performance. Despite the Adani case controversy, the company’s stock price remained resilient.
