Adani Power Shares Rise 3% on New Power Supply Deal with Maharashtra

Adani Power share price witnessed a notable increase of 3% to an intraday high of ₹609.90 on October 31, 2024 at 9.50 AM following the announcement of a significant agreement with the Maharashtra State Electricity Distribution Company Limited (MSEDCL). 

This Power Supply Agreement (PSA) will see Adani Power supply nearly 1,500 MW of electricity for 25 years, a move that is expected to boost the company’s long-term revenue and stability.

Commitment to Renewable Energy

In addition to this development, Adani Green Energy Ltd, a subsidiary of Adani Power, has also secured agreements to provide an additional 5,000 MW of solar power to MSEDCL. This combined effort will result in a total power supply of approximately 6,500 MW from both Adani Power and Adani Renewable Energy Fifty-Five Limited. 

The strategic partnership is indicative of Adani Power’s commitment to renewable energy, aligning with the government’s push towards sustainable power sources.

Financial Performance Overview

Despite the positive news surrounding the new power supply deal, the company’s financial performance in Q2 FY25 reflected challenges. Adani Power reported a significant 50% drop in its consolidated net profit, which stood at ₹3,298 crore compared to ₹6,594.17 crore in the same quarter of the previous year. However, it is worth noting that the company achieved revenue growth, with operational revenue reaching ₹13,339 crore—up 3% from ₹12,991 crore last year.

Resilience in EBITDA and PBT

The earnings before interest, taxes, depreciation, and amortisation (EBITDA) demonstrated resilience, growing 38% year-on-year to ₹11,692 crore for the first half of FY25. In Q2 FY25, continuing EBITDA also saw a healthy increase of 24.6% year-on-year, amounting to ₹5,402 crore. Profit before tax (PBT) showed impressive growth, rising 69% year-on-year in the first half of FY25.

Market Performance and Outlook

As of the latest trading session on October 31, 2024 at 12:28:56 PM, shares of Adani Power are priced at ₹595.60, reflecting an increase of 0.45%. This rise occurred despite a broader market decline, with the benchmark Sensex falling by 0.61%. Year-to-date, shares of Adani Power have surged by 12%, and they have seen a remarkable 77% increase over the past 2 years. With a current market capitalisation of ₹2,30 lakh crore, the company remains a significant player in India’s energy sector, despite the recent fluctuations in profitability.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.