Adani Power Ltd Q3 FY2026 Concall Summary

Key Takeaways

• Resilient operations despite weak demand: Extended monsoons and cooler temperatures pushed all-India power demand flat YoY, yet Adani Power held EBITDA nearly steady through fuel cost advantages and newly acquired assets.
• Merchant exposure deliberately shrinking: The open capacity to PPA ratio moved from 80-20 two years ago to 90-10 now, with a stated path to 3-4% merchant exposure over 6-7 years, insulating earnings from volatile spot prices.
• A 23.7 GW thermal build-out is fully underway: Construction resumed at Korba Phase-II, the Butibori plant is operational, and a 3,200 MW Assam greenfield project received its Letter of Award, all feeding a commissioning pipeline stretching to FY31.
• New PPAs carry structurally higher capacity charges: Management flagged that upcoming PPAs generate EBITDA from plant availability with fuel as a pass-through, and their capacity charges are much higher than legacy contracts, promising better per-MW economics.
• What to watch next quarter: Whether Q4 demand and PLF recover as management expects, progress on the Rajasthan and Maharashtra tenders, and any update on the Bangladesh receivable position.

Demand & Operating Environment

• Monsoons crushed thermal demand: Early monsoons starting May extended into October, lifting hydropower and renewable generation and pushing thermal's energy mix contribution down to 73% from 76% a year ago. All-India power demand was marginally lower at roughly 39,200 crore units, broadly flat YoY.
• Merchant prices fell sharply: Lower thermal demand and higher renewable generation drove merchant market prices significantly below last year, a direct hit to the 10% of capacity still exposed to spot markets.
• Q4 recovery expected: Management expects demand in Q4 to be definitely higher than Q3, with PLF also improving sequentially, as the base effect of the extended monsoon wears out.
• Longer-term demand conviction intact: Household consumption growth and industrialization are expected to drive peak demand higher, supporting good merchant market demand even as renewable capacity increases and takes some edge off pricing over time.

Nishit Dave: "the power plants will now act more as increasingly as we go along, they will start to act more as balancing power plants. And therefore, the focus would be on keeping the plant uptime as high as possible rather than actually trying to maximize the PLF out of them."

PPA Strategy & Merchant Exposure

• Merchant exposure halved in two years: Open capacity fell from 20% to 10% of the portfolio, with management explicitly framing this as a deliberate strategy to moderate rate volatility. The target is 3-4% over the next 6-7 years.
• New PPAs structurally superior: Unlike legacy contracts, new long-term PPAs generate EBITDA from plant availability with fuel charges as a pass-through, and carry much higher capacity charges. Management expects this to drive materially better per-MW EBITDA in coming years.
• Half of upcoming capacity already tied up: Over 90% of the existing 18.15 GW operating fleet is under PPA, and roughly half of the 23.7 GW expansion pipeline is already contracted under long-term PPAs.
• Bilateral demand is strong: Management is seeing good bilateral PPA demand with high tariffs being tied up, and expects other states to launch long-term thermal PPA bids soon. A 400 MW Uttarakhand PPA was signed at INR 5.85/kWh with 50-50 fixed cost, with supply starting next month.
• Rajasthan tender stalled, not dead: The regulator felt the full 3,200 MW PPA may not be required together based on the DISCOM's resource adequacy plans, but the DISCOM has been permitted to present its case again with supporting information.

Dilip Jha: "You might be witnessing our strategy. So, if you see that 2 years ago, our open capacity and the PPA was 80-20, which got reduced to 84-16. Now this is 90 and 10. So we are very much mindful about the merchant tariffs and rate."

Capacity Expansion & Commissioning Pipeline

• Butibori revived and operational: The 600 MW plant acquired in July 2025 after years of shutdown is now fully operational and supplying at full capacity under a 5-year PPA with Maharashtra DISCOM.
• Assam greenfield win: A Letter of Award was received for a 3,200 MW greenfield project under the DBFOO model on state-provided land, with fuel linkage under the SHAKTI Policy. Management declined to disclose project-level capex or equity/debt mix.
• Korba Phase-II construction resumed: The acquired defunct plant has been revived, clearances received, and work started. The first unit is expected around the middle of next year, the second by end of next year.
• Commissioning cadence laid out: FY27: ~2.9 GW (including Mahan Phase-II at ~80% complete and Korba Phase-II). FY28: 2.4 GW. FY29: 2.4 GW (Mahan, Raipur, Raigarh all complete by mid-FY29). FY30: 8 GW. FY31: 5.6 GW. Then 2.4 GW.
• New plants built as balancers, not baseload: State-of-art technology delivers 5-10% better coal utilization than older plants, and locations close to coal sources reduce logistics cost. The operating philosophy is to maximize uptime above 90% rather than chase high PLF.

Nishit Dave: "Yes. And for the other plants, you can expect commissioning 6 months after Mahan, one unit after the other. So, by the middle of FY '29, all these 3 projects would be completed."

Financial Performance

• Revenue down on lower realizations: Continuing revenue declined YoY because merchant prices were significantly lower and import coal price declines reduced energy charges in some import coal-linked PPAs. Higher short-term bilateral realizations partially offset the drop. Other income was also lower due to reduced late payment surcharge income.
• Fuel costs fell, opex rose: Fuel cost declined 9.7% in Q3 and 5.4% in 9M on lower import coal prices. Operating expenses rose 14.8% because recently acquired assets were operational for the full period, plants underwent overhauling, and CSR outlay increased.
• EBITDA nearly flat: Lower revenue was largely offset by cost control, operating efficiency, and contribution from newly acquired assets. Lower power selling rates and higher CSR spend were partly offset by scale benefits.
• PBT up, PAT down on one-time items: PBT improved YoY as lower finance costs offset the EBITDA decline. PAT fell because Q3 FY25 included INR 1,400 cr of prior period income versus only INR 278 cr in Q3 FY26.
• Employee cost base reset: Excluding a INR 56 cr one-time charge for New Labour Codes, staff cost declined 25% YoY as some employees shifted to other parts of the organization. Management guided to a ballpark of INR 150-160 cr going forward but declined to commit to a fixed number given organizational growth.
• Unsecured perpetual securities fully repaid: Outstanding balance is now nil.

Godda Plant & Bangladesh Exposure

• Godda PLF up 18% YoY to 68%: Higher supply drove revenue and EBITDA up YoY for the quarter, though 9M EBITDA fell roughly INR 700 cr due to index reductions.
• Supply continued through political turmoil: Management emphasized that the plant, built in record time under COVID and connecting three countries, never stopped supplying even during the August unrest in Bangladesh. The plant supplies roughly 10% of Bangladesh's total effective capacity.
• Receivables position: Dues are near about one month not due, with about two months overdue. Payment collection is described as regular, and the relationship is intact.

Dilip Jha: "We are supplying around 10% of Bangladesh total effective capacity... We continued our supply when there was a huge turmoil. There was a lot of hardship over there, but we never ever stopped."

Capex & Funding

• INR 2 lakh crore program over 5-6 years: Operating assets are expected to generate INR 1.4 lakh crore, leaving a gap of INR 60,000 crore to be funded from domestic capital markets and banks.
• NCD issuance fills interim gap: INR 7,500 cr raised through AA-rated non-convertible debentures in four tranches with 2-5 year tenures and 8-8.4% coupons, placed with large mutual funds and commercial banks. This is part of the planned funding program.
• Long-term EBITDA and FFO targets: By FY31-32, when the full capacity is added, management projects average EBITDA of INR 22,000 cr and FFO of INR 20,000 cr.

Dilip Jha: "we are very much confident that in the planned way, we will add our capacity"

Guidance & Commitments

Key Metrics