Adani Power Q1 Results - Surge in Profits by 17x, Rise in EBITDA by 227%

The Indian power and energy company, Adani Power, announced its financial results for the first quarter of FY23 on 3rd August 2022. The company reported a massive 1618.01% YoY (year on year) increase, or an approximate 17x growth, in its profit after tax (PAT) to Rs. 4,779.86 crores in Q1 FY23 from Rs. 278.22 crores in Q1 FY22. 

This huge surge in profits is tailed by the increased revenue from operations of the company, which stood at Rs. 13,723.06 crores in Q1 FY23, rising 108.91% YoY from Rs. 6.568.86 crores in Q1 FY22. 

Note that a nationwide heatwave and broad recovery in economic activity drove electricity demand growth in the first quarter of FY23. Because of this, the aggregate energy demand in the country shot up 18.6% YoY to 40,480 crores units. Peak power demand rose to a record level of 215.9 GW during the quarter. However, there was also a domestic shortage of coal coupled with high prices of imported coal, leading to a peak power deficit of 4% and an energy deficit of 1%. 

Consolidated EBITDA for Adani Power in Q1 FY23 was reported at Rs. 7,506 crores, a rise of 227% YoY as against Rs. 2,292 crores in Q1 FY22. The EBITDA growth was aided by prior period income recognition, improved tariff realisation, and a change in the sales mix. This was partially offset by the impact of higher fuel costs, increased operating expenses owing to the acquisition of Mahan Energen Ltd. by the company, and of course, the unfavourable foreign exchange movement.

Adani Power, along with the power plants of its subsidiaries, achieved an Average Plant Load Factor (PLF) of 58.6% and aggregate sales volumes of 1,630 crores units on an installed base of 13,650 MW in Q1 FY23. This was slightly lower in comparison to Q1 FY22, where average PLF stood at 64.8% and sales volume was at 1,620 crores units on an installed base of 12,450 MW. 

As per the company’s management, the effect on operating performance during the quarter was due to high import coal prices. This impacted the performance at Mundra and Udupi, while volumes at Raipur and Raigarh were lower due to domestic coal shortage. However, this impact was partially offset by improved volumes due to the high demand for power at Tiroda and Kawai, and the inclusion of the operating performance of the newly acquired Mahan plant.

The earnings per share (EPS) stood at Rs. 11.58 in Q1 FY23, jumping from a negative EPS of Rs. 0.18 in the same quarter of the previous year. Ahead of the results, Adani Power closed in the green at Rs. 340 apiece, rising 3.49% from the previous day’s closing. 

Hits 

• Profit after tax increased 1618.01% YoY, or an approximate 17x, to Rs. 4,779.86 crores in Q1 FY23.
• Revenue from operations stood at Rs. 13,723.06 crores in Q1 FY23, rising 108.91% YoY.
• Consolidated EBITDA was reported at Rs. 7,506 crores in Q1 FY23, as against Rs. 2,292 crores in Q1 FY22, a rise of 227% YoY. 
• EPS stood at Rs. 11.58 in Q1 FY23, jumping from a negative EPS of Rs. 0.18 in Q1 FY22.
  

Segment-wise Revenue

• Power Generation and related activities: Revenue increased 108.45% YoY to Rs. 13,692.63 crores in Q1 FY23 from Rs.6,568.86 crores in Q1 FY22.
• Trading, investment and other activities: Revenue stood at Rs. 30.43 crores in Q1 FY23.

What the Management Says

Commenting on the quarterly results of the Company, Mr. Anil Sardana, Managing Director, Adani Power Limited, said, "As the world goes through a period of increased uncertainty and hyperinflation in commodity prices caused by geopolitical conflict, India’s energy sector has also faced price-adversity. However, pragmatic policy decisions and abundant natural resources have shielded the economy from its worst impact.

Adani Power Ltd. has been able to utilise the opportunities presented by the market situation effectively, leveraging its diversified fleet and operations-excellence to meet rising power demand. Regulatory issues that were outstanding since long are nearing full resolution, improving visibility and providing us liquidity to propel our drive to realise our long-term strategies and meet our stakeholder value aspirations duly keeping our utmost commitment to ESG aspects.” 

Other Things to know

• Adani Power is a part of the diversified Adani Group and is the largest private thermal power producer in India.
• The company has an installed thermal power capacity of 13,610 MW spread across seven power plants in Gujarat, Maharashtra, Karnataka, Rajasthan, Chhattisgarh, and Madhya Pradesh, apart from a 40 MW solar power plant in Gujarat. 

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Research Analyst: Bavadharini KS