Adani Power hits 5% lower circuit on dismal earnings and a likely reduction in weightage by MSCI

Adani Power: Adani Power Q3 profit tanks 96% YoY to Rs 8.77 crore on significantly higher fuel cost. Revenue jumps 45%. The Adani Group company has recorded consolidated profit at Rs 8.77 crore for quarter ended December FY23, down 96% compared to year-ago period impacted by significantly higher fuel cost, though profit was supported by higher other income. Consolidated revenue for the quarter at Rs 7,764.4 crore increased by 45% over a year-ago period mainly due to greater regulatory claims, increased operating capacity, and improved tariff realization. At the operating level, EBITDA fell by 17% YoY to Rs 1,470 crore with margin down over 1,400 bps YoY for the quarter.

Shares of Adani Power crashed five percent on February 9 after Q3 FY23 results disappointed the Street. Additionally, report that MSCI will review the free float of Adani Group stock rose concerns among investors. The review can potentially alter the weightage of the stock, which could result in an outflow of investors.

At 9:16 am, shares of the company were trading 5 percent lower at Rs 172.90 on the BSE. They were locked in their lower circuit.

The power company reported a 96 percent decline in consolidated net profit at Rs 8.77 crore for the December quarter of 2022-23 mainly on the back of higher expenses. In the year-ago period, the profit was Rs 218.49 crore.

In the reporting quarter, revenue from operations came in at Rs 7,764.41 crore against Rs 5360.88 crore in the corresponding period last year. The company said the growth in sales was mainly due to higher regulatory income, increased operating capacity, and improved tariff realisation under long-term Power Purchase Agreements.

Majority of Adani Power’s revenues come from power generation and related activities.

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Meanwhile, EBITDA (Earnings before interest tax depreciation and amortisation) for the December quarter stood marginally lower at Rs 1,996 crore, as compared to Rs 2,003 crore last year, constrained mainly by higher fuel cost, which was partially offset by higher one-time income, the thermal power producer said in an exchange filing.

Lately, Adani Group stocks have been in the limelight due to the Hindenburg attack.

On February 9, MSCI (Morgan Stanley Capital International) said certain investors in Adani Group securities should no longer be designated as free float, and it is reviewing this status. Adani Power is also a part of the MSCI India index with a weightage of 18 basis points.