MSCI Inclusion Impact: Adani Power hits record high, up 35% in seven days

Shares of Adani Power were locked in the 5 per cent upper circuit at Rs 327.50, also its record high on the BSE in Monday’s trade. In the process, the stock traded higher for the seven straight day. Till 10:06 am; a combined 12.3 million shares changed hands and there were pending buy orders for 2.4 million shares on the NSE and BSE.

The stock of Adani Group electric utilities company surged 35 per cent in past seven days after index provider MSCI included Adani Power in its global index. In the past three months, the stock has zoomed 161 per cent, as compared to 5 per cent decline in the S&P BSE Sensex.

From India, MSCI has added 4 stocks - Adani Power, AU Small Finance Bank, Jindal Steel and Power, and Tata Elxsi, whereas, deleted HDFC AMC. The changes announced by MSCI will be effective from June 1, while index funds are likely to realign their portfolios on May 31.

Adani Power 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.

During January-March quarter (Q4FY22) Adani Power, along with the power plants of its subsidiaries achieved an Average Plant Load Factor (PLF) of 52.1 per cent, and aggregate sales volumes of 13.1 Billion Units [BU]. In comparison, during Q4 FY21,  the company and its subsidiaries achieved an average PLF of 59.6 per cent and sales volume of 14.8 BU. Operating performance during the quarter was affected due to high import coal prices and plant overhaul, partially offset by improved volumes due to high demand for power.

The company’s earnings before interest, taxes, depreciation, and amortization (ebitda) jumped 271 per cent year on year at Rs 7,942 crore, as compared to Rs 2,143 crore in Q4FY21.

Ebitda growth was aided by prior period income recognition, greater shortfall claims due to high import coal prices, and higher merchant and short term tariffs and volumes, as compared to Q4FY21. Electricity demand continues to grow strongly in India, driven both by economic growth and a heatwave in the north-western parts of the country, Adani Power said.