Adani Power: Invest Now?

Adani Power Ltd. is a holding company and thermal power producer in India with a power generation capacity of approximately 12,450 megawatts (MW). The company has a market cap of Rs 279,608.79 Crore and has seen its share price skyrocket in recent times. In the last four trade sessions, the Adani group stock's share price has climbed over 70 per cent. This sharp rise can be attributed to two major reasons: its investments in green energy, and partial payments received by the Rajasthan and Maharashtra governments that were long overdue. The cancellation of Adani Power share price delisting has also favoured the stock price rally, as a fresh delisting would take place at a higher price.

Adani Power's share price history and future predictions

Adani Power Ltd. is a holding company and thermal power producer in India with a power generation capacity of approximately 12,450 megawatts (MW). It has a market capitalization of Rs 2,79,609 Cr. Within the Power sector, its market cap rank is 3.

Adani Power's share price as of 10 July 2024 was Rs 725.20, up by 0.04% from its previous close of Rs 698.05.

• Last 1 Week: Share price moved up by 1.39%
• Last 1 Month: Share price moved down by 5.78%
• Last 3 Months: Share price moved up by 17.37%
• Last 6 Months: Share price moved up by 33.73%
• Last 12 Months: Share price moved up by 199.61%
• Last 3 Years: Share price moved up by 561.98%

The company's annual revenue growth of 40.06% outperformed its 3-year CAGR of 28.57%. Its employee cost and interest expenses for the year ending 31 Mar 2024 were 1.28% and 6.73% of operating revenues, respectively.

Adani Power's PE ratio stands at 13.41, and its PB ratio is 6.45. The company's top management includes Mr. Gautam S Adani, Mr. Anil Sardana, Mr. Shersingh B Khyalia, and others.

The company's revenue growth

Adani Power Limited is a holding company and India's largest private thermal power producer. It has a power generation capacity of approximately 12,450 megawatts (MW) and focuses on providing power generation and coal trading.

Adani Power's revenue growth has been strong in recent years. In the fourth quarter of fiscal 2024, the company's revenue rose to Rs 13,363.69 crore, a 30.47% increase compared to the same period last year. This growth is in line with the company's annual revenue growth of 40.06%, which outperformed its 3-year CAGR of 28.57%.

Adani Power's revenue growth can be attributed to its focus on tech-enabled reliability enhancement, reduction in the cost of generation, and improvement in plant efficiency. The company has also been able to increase its market share, accounting for 6% of India's total power generation from thermal power plants and 16% of all power generated by private sector thermal power plants as of FY23.

The company has delivered good profit growth, with a 5-year CAGR of 88.5% and a 3-year ROE of 47.8%. Adani Power's subsidiaries include Adani Power (Jharkhand) Limited, Mahan Energen Limited, Adani Power Dahej Limited, Pench Thermal Energy (MP) Limited, and Kutchh Power Generation Limited.

Overall, Adani Power's strong revenue growth and market position make it a significant player in India's power generation sector.

Adani Power's shareholding pattern

Adani Power Ltd. is a holding company and thermal power producer in India with a power generation capacity of approximately 12,450 megawatts (MW). The company's shareholding pattern as of 31 March 2024 is as follows:

• Promoter holding: 71.75% (down from 74.97% in 2023)
• Domestic Institutional Investors: 1.41% (up from 0.01% in 2023)
• Foreign Institutional Investors: 15.91% (up from 11.7% in 2023)
• Other investors: 10.93% (down from 13.31% in 2023)

The company's top management includes Mr. Gautam S Adani (Non-Executive Chairman), Mr. Anil Sardana (Managing Director), Mr. Shersingh B Khyalia (Chief Executive Officer), and Mr. Rajesh S Adani (Non-Executive Director).

The company's subsidiaries

Adani Power Limited is a holding company and a subsidiary of the Adani Group. It has several subsidiaries of its own, including:

• Adani Power (Jharkhand) Limited
• Mahan Energen Limited
• Adani Power Dahej Limited
• Pench Thermal Energy (MP) Limited
• Kutchh Power Generation Limited
• Adani Power Maharashtra Limited
• Adani Power Rajasthan Limited
• Udupi Power Corporation Limited
• Adani Power Resources Limited

Adani Power's business activity is undertaken at its Mundra Thermal Power Plant in Gujarat and the thermal power plants of its subsidiaries at Tiroda in Maharashtra, Kawai in Rajasthan, and Udupi in Karnataka. Adani Power has built and operates over 9,240 MW of thermal power capacity through its subsidiaries, including a 4,620 MW plant at Mundra in Gujarat, a 3,300 MW plant at Tiroda in Maharashtra, and a 1,320 MW plant at Kawai in Rajasthan. The company also has three thermal power plants with a total capacity of approximately 3,170 MW, comprising a 1,200 MW plant at Udupi in Karnataka, a 1,370 MW plant at Raipur in Chhattisgarh, and a 600 MW plant at Raigarh in Chhattisgarh.

Adani Power's financial strengths and weaknesses

Adani Power is one of the largest private sector independent power producers in India. The company has a power generation capacity of approximately 12,450 megawatts (MW), comprising 12,410 MW of thermal power plants and a 40 MW solar power project.

Financial Strengths

• Adani Power has a strong financial standing, with a rising net cash flow and cash from operating activities.
• The company has a well-diversified finance sourcing strategy, attracting funds from global and domestic banks, capital markets, and other sources, eliminating concentration risk.
• Adani Power has a robust maturity cover, with a maturity profile for debt that exceeds the cover period, ensuring refinancing protection and eliminating systemic risks.
• The company has a high degree of stability and earnings predictability, with a significant contribution from core infrastructure and utility platforms to its portfolio EBITDA.
• Adani Power has a strong presence in the Indian power sector, with interests in various power plants in different states, including Gujarat, Chhattisgarh, Maharashtra, Madhya Pradesh, Rajasthan, and Karnataka.
• The company has a 10-year equity program with long-only global investors, attracting over USD 9.5 billion since 2019, supporting its strategic priorities.

Financial Weaknesses

• Adani Power's stocks have shown a declining trend, with a fall of up to 3% amid market weakness.
• There is an increasing trend in non-core income, which may impact the company's core business.
• Promoters have increased pledged shares QoQ, which could dilute existing shareholders' ownership and impact decision-making.
• Adani Power's subsidiary, Adani Energy Solutions (formerly Adani Transmission), experienced a 1.56% decline, although it announced a successful financial closure for its $1 billion Green HVDC link project.

Frequently asked questions