Adani Power Limited (APL) has announced a significant surge in its consolidated net profit, reaching ₹2,738 crore for the third quarter ending December 31, 2023. This is a substantial increase compared to the ₹8.8 crore net profit reported in the same quarter of the previous year, as per the company’s recent regulatory filing.
This remarkable growth in profits is accompanied by a notable 67.3% rise in the company’s operational revenue, which escalated to ₹12,991.4 crore from ₹7,764.4 crore recorded in the corresponding quarter of the prior fiscal year.
At the operational level, the company’s earnings before interest, tax, depreciation, and amortisation (EBITDA) showed a significant improvement. It stood at ₹4,645.3 crore in this fiscal’s third quarter, a substantial increase from ₹1,469.8 crore in the same period last year. The EBITDA margin also improved, reaching 35.8% in the reported quarter, up from 18.9% in the corresponding period of the previous fiscal year.
The revenue for the third quarter of the financial year 2024, which was reported at ₹13,355 crore, includes a one-time adjustment. This adjustment, amounting to a net de-recognition of ₹50 crore, relates to prior period items due to domestic coal shortfall, carrying costs, and late payment surcharge. For comparison, the revenue reported for the third quarter of the fiscal year 2023 included a one-time recognition of prior period items amounting to ₹517 crore.
For the first nine months (9M) of the fiscal year 2024, the reported revenues stood at ₹46,400 crore. This figure includes the recognition of one-time prior period items totaling ₹9,227 crore, attributed to similar reasons as the quarterly adjustment. This is an increase from the one-time prior period recognition of ₹5,641 crore for the same period in the previous fiscal year.
The depreciation charge for the third quarter of the fiscal year 2024 also saw an increase, reaching ₹1,002 crore, up from ₹838 crore in the same quarter of the previous year. This increase is largely due to the addition of the Godda power plant. The depreciation charge for the first nine months of the fiscal year 2024 similarly rose to ₹2,941 crore from ₹2,487 crore in the comparable period of the previous year.
Furthermore, the finance costs for the third quarter of the fiscal year 2024 showed a decline, dropping to ₹797 crore from ₹946 crore in the corresponding quarter of the previous year. This reduction is primarily due to a decrease in secured and unsecured debt over the past year, though partially offset by higher borrowing costs related to the Godda power plant. The finance costs for the first nine months of the fiscal year 2024 also saw a marginal decrease, falling to ₹2,568 crore from ₹2,588 crore in the same period of the previous fiscal year.
The profit before tax (PBT) for the third quarter of the fiscal year 2024 was considerably higher, recorded at ₹3,210 crore, compared to a PBT of ₹212 crore for the same quarter in the previous year. The PBT for the first nine months of the fiscal year 2024 also showed a significant increase, up by 154% at ₹17,234 crore, compared to ₹6,777 crore in the same period of the previous fiscal year.
These financial results were released after market hours. At the close of market hours, the shares of Adani Power Limited were trading at ₹542.50, marking an increase of ₹22.85 or 4.40%, on the BSE.
The remarkable turnaround in Adani Power Limited’s financial performance, particularly in the third quarter of FY24, can be attributed to several strategic and operational factors. The significant increase in the company’s net profit and revenue highlights its effective management and robust growth strategy in the power sector. The 67.3% increase in operational revenue is a testament to the company’s ability to capitalize on market opportunities and optimize its operations.
Adani Power’s impressive EBITDA growth, from ₹1,469.8 crore to ₹4,645.3 crore, and the improvement in EBITDA margins from 18.9% to 35.8%, reflect its operational efficiency and successful cost management strategies. These figures indicate a strong financial discipline and an enhanced ability to generate higher profitability.
The reported revenue adjustments due to prior period items related to domestic coal shortfall and other factors show the company’s transparency in financial reporting and its ability to adapt to external challenges. The increase in depreciation charges due to the addition of the Godda power plant is indicative of the company’s expansion strategy and long-term investment in capacity enhancement.
Moreover, the reduction in finance costs, despite the higher borrowing costs for the Godda power plant, underscores the company’s prudent financial management and strategic debt restructuring efforts. This has not only helped in reducing the overall debt burden but also in improving the financial health of the company.
Adani Power’s impressive profit before tax figures, both for the third quarter and the first nine months of FY24, demonstrate the company’s strong operational performance and its ability to leverage its capabilities for substantial growth. This remarkable financial performance is likely to boost investor confidence and reflects positively on the company’s market valuation, as seen in the rise of its share price on the BSE.
Overall, Adani Power’s financial results for the third quarter of FY24 paint a picture of a company that is on a solid growth trajectory, with effective management, strong operational capabilities, and a clear strategic direction. This positions Adani Power as a key player in the power sector, capable of delivering value to its shareholders and contributing significantly to the energy sector’s growth.