Adani Power gains 25% in 7 days: What's driving rally
What's the story
Adani Power's stock has experienced a 25% surge over the last seven trading days, hitting Rs. 389.50 on BSE during Friday's intra-day trading. Its 52-week high remains at Rs. 409.70 apiece. The company posted a strong profit after tax (PAT) of Rs. 6,594 crore for Q2 FY24, a whopping 9.5 times jump from the previous year's Rs. 696 crore. The mammoth rise in profits is credited to enhanced operational efficiency, increased one-time income, and the acknowledgment of deferred tax assets.
Details
Factors contributing to Adani Power's Q2 earnings
The firm's consolidated continuing earnings before interest, taxes, depreciation, and amortization (EBITDA) witnessed a 202% YoY growth, reaching Rs. 4,336 crore in Q2 FY24. This rise resulted from higher sales volumes, reduced fuel expenses, and increased merchant tariffs. Net sales for the quarter amounted to Rs. 12,991 crore, an impressive 84.4% growth from the previous year's Rs. 7,044 crore, mainly due to increased sales volumes. At the time of writing, the stock traded at Rs. 384.90, up 3.20% on NSE.
What Next?
Improved power demand and operating capacity
In Q2FY24, Adani Power recorded a consolidated power sale volume of 18.1 Billion Units (BU), a 65% increase from 11 BU in Q2FY23. This expansion is credited to heightened power demand and greater operating capacity. The company's Q2 FY24 operating performance includes the input of the 1,600 MW Godda Ultra-supercritical thermal power plant owned by its subsidiary Adani Power (Jharkhand) Limited (APJL), which was commissioned in Q1 F24.
Insights
Adani Power's expanding portfolio
Currently, Adani Power has an installed thermal power capacity of 15,210 MW across eight power plants in Gujarat, Maharashtra, Karnataka, Rajasthan, Chhattisgarh, Madhya Pradesh, and Jharkhand. The company also operates a 40 MW solar power plant in Gujarat. The enhanced performance during Q2 FY24 can be attributed to increased power uptake in the Mundra, Udupi, Raipur, and Mahan plants, as well as the additional contribution from the Godda plant.