Adani Power sizzles after Q2 net profit soars to Rs 2228 cr

Adani Power jumped 6.46% to Rs 38.75 after the company reported a consolidated net profit of Rs 2228.05 crore in Q2 September 2020 as against Rs 3.88 crore in Q2 September 2019.

Total income during the quarter increased by 29% year-on-year (YoY) to Rs 8,792.28 crore. This includes one-time revenue recognition of Rs 3,624 crore mainly towards compensatory tariff and carrying cost in Q2 FY 2020-21 as compared to Rs 730 crore in Q2 FY 2019-20. This one-time revenue recognition in the current quarter was on account of regulatory approvals of APML's claims for coal shortfall compensation and carrying costs.

The Supreme Court, vide its order dated 31 August 2020, partially allowed claims of Adani Power Rajasthan (APRL), APL's wholly owned subsidiary, to recover compensatory tariff from Rajasthan DISCOMs as per the order of the Appellate Tribunal Of Electricity (APTEL) dated 14 September 2019. However, Rajasthan DISCOMs have filed a review petition in the Supreme Court.

Further, APTEL has also allowed, vide its order dated 5 October 2020, appeal by Adani Power Maharashtra (APML), APL's wholly owned subsidiary, against an order of the Maharashtra Electricity Regulatory Commission (MERC) regarding coal shortfall compensation due to de-allocation of the Lohara coal block, along with carrying cost.

During the second quarter of FY 2020-21, APL and its subsidiaries achieved an Average Plant Load Factor (PLF) of 49.9% and sales volume of 12.6 Billion Units (BU), as compared to a PLF of 59.2% and sales volume of 14.5 BU recorded in the second quarter of FY 2019-20.

This lower performance was primarily a result of customer back-downs in Maharashtra and a subdued merchant market partially offset by higher grid demand and improved coal availability in Rajasthan as well as full quarter utilization of the recently acquired power plants in Chhattisgarh, the company said in a statement.

Profit before tax in Q2 September 2020 stood at Rs 2893.93 crore as against Rs 157.98 crore in Q2 September 2019. The company wrote back taxes worth Rs 8.08 crore in the second quarter.

EBITDA for Q2 FY21 stood at Rs 5,086 crore compared with Rs 2,248 crore in Q2 FY20, mainly due to one-time revenue recognition.

Depreciation charge rose by 8.2% in Q2 FY21 to Rs 828 crore as compared to Rs 765 crore in Q2 FY20. The depreciation charge for the corresponding previous quarter was lower due to incorporation of the consolidation of REL and REGL during the course of the quarter.

Anil Sardana, managing director, Adani Power, said: "India's power demand has started to show strong improvement with revival of its economic growth engine, after the slump brought by the pandemic. Adani Power, with its modern and efficient portfolio, strong expansion pipeline. and unmatched fuel management as well as deep operational expertise, will be at the forefront to meet the future power needs of the nation with reliable and cost-effective supply.

We have a strong belief in the essentiality of conventional power and its compatibility with the renewable growth imperative. With our complementarity with the Adani Group's energy mix portfolio and partnerships in natural gas and solar energy, we will continue to seize value accretive opportunities and pursue our long-term growth strategies."

Adani Power (APL), a part of the diversified Adani Group, is the largest private thermal power producer in India. The company has an installed thermal power capacity of 12,410 MW spread across six power plants in Gujarat, Maharashtra, Karnataka, Rajasthan and Chhattisgarh, apart from a 40 MW solar power plant in Gujarat.

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