Adani Power Ltd Q4 FY26 Earnings Analysis

- Adani Power plans to expand capacity from 18.15 GW to 42 GW by FY '31-'32, nearly doubling capacity. - Expected capex for the expansion is about INR 2 trillion (~USD 22 billion), largely funded through internal accruals and some market/bank financing. - Higher capacity tied up under PPAs provides stable revenue visibility; 90%+ of current operating fleet under long-term/medium-term PPAs, reducing market volatility exposure. - EBITDA growth expected from new PPAs with better capacity charges and pass-through fuel costs. - Power sales volume rose to 71.8 billion units for 9M FY26, up from 69.5 billion units last year, supported by capacity additions. - Demand is projected to rise with power peak expected to reach 380-400 GW by FY32, supporting merchant market demand and pricing. - Incremental sales/revenue driven by commissioning of new plants (e.g., Korba, Mahan, Raipur) from FY27 onwards. - Management expresses confidence in long-term power demand and revenue growth visibility.

- Adani Power plans to expand capacity from 18.15 GW to 42 GW by FY '31-'32, adding 24 GW over 6-7 years. - Majority of the INR 2 trillion (USD 22 billion) capex will be funded through strong internal accruals (INR 1.4 trillion expected EBITDA/FFO over 5-6 years). - EBITDA and cash flow expected to be robust enough to fully repay debt by FY '31-'32, still leaving significant surplus cash flow. - New PPAs for added capacity have higher tariffs with 100% EBITDA driven by fixed capacity charges and fuel pass-through, improving earnings visibility and margins. - Operating assets generate yearly EBITDA of about INR 22,000 crores and FFO of INR 20,000 crores, providing strong recurring earnings. - Growth supported by improved plant efficiencies, technological upgrades, and focus on long-term contracted revenues reducing merchant exposure. - Return on assets expected to be among the best in the industry by FY '31-'32.

- Adani Power plans a capex of around INR 2 lakh crores (USD 22 billion) over 5-6 years to add 24 GW capacity, expanding total capacity from 18.15 GW to 42 GW by FY '31-'32. - Majority of capex funding will come from internal accruals (~INR 1.4 lakh crores from existing assets) with interim funding via domestic capital markets and banks to cover a gap of INR 60,000 crores. - No project-wise funding; capex will be funded from overall company accruals. - Capex cost for the Assam greenfield project is ~INR 10 crores per MW. - Recent fundraise through INR 7,500 crores AA-rated NCDs supports capacity expansion and working capital. - Ongoing projects: Mahan Phase-II (~80% complete), Raipur Phase-II (~44%), Raigarh Phase-II (~38%), and Korba Phase 2 construction resumed; phased commissioning from FY '27 onwards. - Focus on tying up capacity via long-term PPAs to ensure revenue visibility and reduce market volatility.

- Adani Power is not pursuing any project-wise financial closure. - Majority of the capex will be funded from internal accruals generated by operating assets (about INR 1.4 lakh crores over 5-6 years). - There is an interim funding gap of approximately INR 60,000 crores. - This interim gap is being funded through a mix of domestic capital markets and domestic banks. - A recent example includes a INR 7,500 crore Non-Convertible Debenture (NCD) issuance in four tranches with coupon rates ranging from 8% to 8.4%. - The company has strong liquidity and a solid credit rating (AA stable). - By FY '31-'32, Adani Power aims to have sufficient cash flow and EBITDA to fully pay down its entire debt. - No explicit plans for new equity fundraising were mentioned.

- Adani Power is progressing well on a 23.7 GW thermal expansion program. - Current orderbook includes projects like Mahan Phase-II (80% complete), Raipur Phase-II (44% complete), Raigarh Phase-II (38% complete), and Korba Phase 2 (construction resumed). - These projects are scheduled for phased commissioning starting FY '27. - The company is actively participating in ongoing bids for 15 GW to fill the remaining 12 GW capacity. - Expectation of new long-term PPA bids for thermal power from other states soon. - A 3,200 MW greenfield project in Assam has been awarded; it's part of upcoming capacity additions. - The company plans to move from 18.15 GW to 42 GW capacity by 2031-32, underpinned by secured PPAs.