Adani Power Ltd Q1 FY2026 Concall Summary

Key Takeaways

• Stable quarter despite demand headwinds: All-India power demand fell 1.6% on early monsoon, yet Adani Power grew dispatch 1.6% YoY and delivered PAT of ₹3,305 cr, aided by fuel cost control and acquired capacity.
• Bangladesh risk materially recedes: Over US $500 million received from Bangladesh Power Development Board in June and July, bringing outstanding receivables to near-normal levels after being a persistent concern.
• Thermal capex conviction hardens: Management locked in boiler, turbine and generator supplies for the full 11.2 GW new capacity pipeline, with the government now targeting 95 GW of additional thermal capacity, up from 80 GW.
• FGD cost relief is a tailwind: A regulatory notification drops the FGD requirement for plants where execution has not started, lowering project costs for the expansion pipeline, though Mahan and Raipur remain committed.
• What to watch next quarter: Whether merchant realizations recover as the early monsoon exits, the pace of PPA signings from the Rajasthan, Uttarakhand, Bihar and Madhya Pradesh tenders, and the Dhirauli mine commissioning timeline.

Thermal Capacity Expansion

• 11.2 GW pipeline fully equipped: Boilers, turbines and generators are locked in for the entire 11.2 GW new capacity addition, with erection, commissioning and Balance of Plant contracts being tied up in phases.
• Land secured, funding de-risked: All land required for expansion is already possessed, and projects will be funded mostly from own cash flows, removing reliance on project lenders.
• 4,800 MW under rapid execution: Of the 12,520 MW target by 2030, 4,800 MW is already under rapid execution, with Korba Phase-II receiving environmental clearance for an additional 1,320 MW.
• Government target raised: India's additional thermal capacity requirement is now expected to reach 95 GW, up from the earlier 80 GW target, reinforcing the demand case for new builds.
• Equipment orders still being evaluated: On whether orders have been placed with other equipment players beyond the locked-in suppliers, management said it is evaluating all options and will share numbers in due course.

S.B. Khyalia: "We are firm believers in the promise of the power sector, which is closely aligned with India's economic prospects. We are confident that the path to a secure and sustainable energy future passes through the thermal power landscape and that coal will continue to be an important energy source for many decades to come."

Bangladesh & Regulatory Receivables

• Bangladesh payments normalize: More than US $500 million was received from the Bangladesh Power Development Board in June and July, and the customer is now paying regularly, bringing outstanding receivables to near-normal levels.
• Haryana alternate coal compensation unresolved: Discussions are ongoing, with Haryana currently paying 50% of the difference of bills raised; management expects resolution soon.
• Regulatory receivables immaterial: Nothing substantial is pending beyond small regular regulatory changes, and no claim exists that could materially change revenue or profitability.

S.B. Khyalia: "The customer has been paying us now regularly. As a result, the outstanding receivables position has now been brought to near normal level, which was so far an issue of concern."

Acquired Asset Integration

• Lanco Amarkantak largely settled: Only a small ash disposal issue remains to be addressed.
• Coastal Energen overhaul underway: One unit is completely overhauled and now at par; the second unit is undergoing complete overhauling this month, with delays attributable to non-domestic equipment and spares requiring longer procurement lead times.
• Vidarbha restored from shutdown: The plant had been shut since 2018, but advance planning during the NCLT process allowed proper overhauling, and it is now good for normal availability.

Merchant & Demand Environment

• Q1 merchant realization fell sharply: Merchant tariffs dropped to ₹6.51/kWh from ₹7.60/kWh YoY because the monsoon arrived in May and weather disturbances in April kept Q1 power demand sluggish.
• Q2 outlook hinges on monsoon exit: Since the monsoon arrived early, management expects it to end early, driving a demand pickup and merchant rates better than last year, when a delayed monsoon hurt Q2.
• PPA pipeline active: Tenders from Rajasthan, Uttarakhand, Bihar and Madhya Pradesh are under progress, and management hopes to win and sign PPAs as bids are finalized.
• UPPCL PPA signed: A long-term PPA was signed with Uttar Pradesh Discom for 1,600 MW gross capacity at a capacity charge of 3.73 and total tariff of 5.39 for 1,500 MW net capacity, bringing fresh capacity tie-ups to 4,520 MW.

Financial Position

• Debt rose on bridge financing: Total debt increased to ₹44,372 cr and net debt to ₹37,437 cr due to ongoing capex and interim bridge funding from banks; management emphasized that internal accruals are sufficient to meet the year's capex requirement.
• UPS fully retired: ₹2,579 cr of Unsecured Perpetual Securities principal was repaid in Q1, plus ₹1,146 cr in distributions, and the remaining ₹478 cr was paid in July, leaving no outstanding balance including distributions.
• Godda amalgamation upgraded credit: The amalgamation of Adani Power (Jharkhand) Limited brought the 1,600 MW Godda plant into APL's standalone entity, leading to an implicit credit rating upgrade to AA Stable and reducing finance costs.
• Finance cost tightly controlled: Finance cost held at ₹857 cr despite new acquisitions and increased scale.
• Dhirauli mine on track: Production is expected to start by September or October, consistent with the earlier plan.

Dilip Jha: "On average, on an annual basis, our FFO is more than Rs.21,000 crores and then in the next five years, it will be more than Rs.1 lakh crore. Our CAPEX program is also of that amount in aggregate."

FGD & Environmental Cost Relief

• FGD requirement dropped for unstarted plants: After a regulatory notification, power stations under planning or execution where FGD execution has not started no longer require FGD, lowering project costs for the expansion pipeline.
• Mahan and Raipur remain committed: These plants are in an advanced stage of FGD execution, so work will continue.
• Project cost details withheld: Management declined to provide a bifurcation of project costs or detailed numbers related to FGD cost changes, calling it inappropriate to discuss at this stage.

S.B. Khyalia: "After this notification has come, the power stations which are under planning and execution, where we have not started the execution of FGD, do not have a requirement of FGD now."

Guidance & Commitments

Key Metrics