Factors that may dent Adani Power's Q1 numbers

Adani Power’s may report 42 percent year-on-year decline in loss during June quarter to Rs 460 crore, states a CNBC-TV18 poll. Sales are expected to rise over 59 percent Y-o-Y to Rs 2332 crore as per analysts estimate.

Read This: Tariff order clarity for Adani Power & Tata Power soon

Factors that will impact Adani's Q1 numbers which will be announced later in the day:

Overall, plant load factors (PLFs) are expected to slide to 64.7 percent from 66.7 percent quarter-on-quarter.

However, Mundra PLFs improved, implying losses should decrease
 
Expect increase in interest expense and depreciation on a Y-o-Y basis because of commissioning of its Tiroda plant

Expect jump in sales on a Y-o-Y and Q-o-Q basis due to commissioning of Tiroda plant.

Adani is also expected to see 68 percent jump in gross generation units on a Y-o-Y basis.

Better profitability in Tiroda may lead to growth in margins

However higher depreciation and interest cost is likely to lead to higher losses.
 
Though, the company is one of the biggest beneficiaries of declining imported coal prices as around 65 percent of its fuel cost is in dollar terms, a constantly weakening rupee has posed operational risk. Also, around 70 percent of company debt is denominated in foreign currency.

Furthermore, with the recent ruling of the CERC (Central Electricity Regulatory Commission), the company is certain to receive some form of 'compensatory tariff' over and above the existing power purchase agreement tariff

Stock strategy
Adani Power closed the day at Rs 35, down 5 percent and is making new lifetime lows currently since its balance sheet has become stretched with heavy losses and high debt leading to around 8.8x leverage