Adani Power shares in focus post Q3 results, sale of two subsidiaries

Shares of Adani Power Ltd will be in focus in Monday's trade after the Adani group firm's December quarter results and its decision to sell of two of subsidiaries. Adani Power reported a multi-fold surge in consolidated net profit at Rs 2,738 crore for the December quarter on recovery in industrial demand and a lower base. The Adani group firm had clocked a consolidated net profit of mere Rs 9 crore in the corresponding quarter last year.

Adani Power said its sales for the third quarter was up 67 per cent to Rs 12,991 crore compared with Rs 7,764 crore in the same quarter last year. Finance Costs fell to to Rs 797 crore from Rs 946 crore, thanks to reduction in secured and unsecured debt over the past year, partly offset by higher borrowing cost for the Godda power plant.

Ebitda, Adani Power said, was up thanks to lower import fuel prices and alternate fuel costs, addition of capacity charges recovery under the Godda PPA, and higher contribution from merchant sales due to higher tariffs.

Update on subsidiaries

Adani Power in a separate note said it entered into a Memorandum of Understanding (MOU) to sell its 100 per cent equity stake in its two wholly owned subsidiaries, i.e. Aviceda Infra Park Limited (AIPL); and Innovant Buildwell Private Limited (IBPL) to AdaniConnex Private Limited (ACX). Consequently, AIPL and IBPL will cease to be wholly owned subsidiaries upon completion of the sale, Adani Power said.

What management says

Adani Power said it used improved liquidity to cut debt and said the 1,600 MW brownfield capacity at Mahan was on track.

CEO S B Khyalia said the company’s strategically located power plants and optimal capacity allocation between PPAs and merchant capacities, coupled with its strength in fuel management & logistics and excellence in power plant O&M, "allowed it to address growing power demand and generate robust profitability."

"This has resulted in We are excited to be a part of nation-building efforts through provision of reliable electricity supply from our highly efficient power plants while keeping sustainability goals at the forefront of our agenda.”

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