Adani Power shares in focus ahead of Q4 results; stock up 2%

Shares of Adani Power were in focus on Friday ahead of its results for the period ended on March 31, 2023. The Adani Group's utility arm will announce its financial results for the quarter and year ended March 2023, the company had informed the bourses through in exchange filing.

Shares of Adani Power rose about 2 per cent to Rs 243 on Friday, before turning flat and the company was commanding a market capitalization of Rs 92,500 crore. The scrip had settled at Rs 238.20 on Thursday. The stock has jumped close to 30 per cent in the last one month.

The stock has surged about 85 per cent from its 52-week lows at Rs 132.55 on February 28, 2023. The stock, akin to other Group companies, was hammered sharply after the scathing report by Hindenburg on Adani Group. It needs to rally another 80 per cent to hit its 52-week high of Rs 432.80. The stock has gained more than 700 per cent in the last three years.

However, Not many analysts have their view on Adani Power. Even it does not make its place in preview reports by the domestic brokerage firms such as Elara Capital and JM Financial. However, the brokerage firms are positive on the utility sector considering the rising demand within the country.

India’s overall power generation grew 11.9 per cent YoY in Q4FY23, led by agricultural and commercial segments that accounted for increased demand. Coal-based thermal generation rose 12.1 per cent YoY. Gas generation improved marginally in Q4, up 1.2% YoY, post the slight normalization in spot gas prices, said Elara Capital.

Renewable energy (RE) generation surged 20.4% YoY, leading the overall generation mix after lignite, in Q4. Hydro-based generation saw a dip of 4.2% YoY in the same period. RE generation stood at an average of 10.9 per cent (10.2 per cent in Q4FY22), of the total power generation in Q4FY23. In Q4FY23, it said.

"IEX achieved 26,051 million units (MU) cumulative volume, with 3.6 per cent YoY contraction in Jan-March 2023. Average prices on the day ahead market surged to Rs 6 per unit in Q4FY23 from Rs 4.5 in Q3FY23 owing to slightly improved supply-side availability," it added.

JM Financial Services said that overall power demand in India during Q5FU23 remained resilient but was impacted by unseasonal rainfall. Also, power generation has remained strongly supported by higher coal productions.

"We expect the utilities under our coverage to report 3 per cent sequential growth in revenue led by higher generation during the quarter and better PLFs. EBITDA and PAT could improve by 3 per cent and 16 per cent QoQ respectively led by moderation in operating expenses and higher sales," it said.

According to JM Financial, power demand in summer, trend in international coal prices, and the pace of transition to clean energy would be key monitorables. Overall, It remains positive on the utilities space with power demand expected to remain strong in the near term and energy transition driving long-term growth.

Its peer Tata Power on Thursday reported a consolidated net profit of Rs 939 crore for the fourth quarter ended March 2023, up 48 per cent on a year-on-year (YoY) basis from Rs 632 crore in the corresponding quarter last year. Its consolidated revenue climbed 6 per cent at Rs 12,755 crore in Q4FY23 against Rs 12,085 crore in Q4FY22.