Adani Power FY26: ₹54,240 Cr Revenue, 95% Capacity Contracted—But PLF Slipped

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1. At a Glance

Adani Power closed FY26 with ₹54,240 crore in revenue—a 3.5% decline from ₹56,203 crore in FY25, the first contraction in two years. Net profit fell 0.8% to ₹12,834 crore. The tension: capacity utilization (PLF) dropped to 67% in FY26 from 71% in FY25, yet the company locked 95% of its 18.15 GW operating base into long-term PPAs, hedging itself against merchant volatility.

Merchant capacity exposure tumbled to 5% by year-end. Management says this kills short-term upside but secures visibility. The question: can 23.7 GW of greenfield capacity—largely pre-contracted—compensate for flat current earnings and aging thermal assets?

2. Introduction

Adani Power sits at the crossroads of two India power stories. One: the company is the country’s largest private thermal generator, claiming 7.3% of domestic coal-based capacity and a 25-year track record (and some scars). The other: it’s executing a ₹2 lakh crore capex blitz to add 23.7 GW of coal capacity by 2032, betting that thermal will never vanish from India’s grid.

FY26 revealed the strain. Weak monsoon demand, extended rains, and merchant price depression (driven by renewable glut) compressed volumes. Yet the year also marked a strategic reset: the 1,600 MW MSEDCL Maharashtra LoA at ₹5.30/unit arrived in March, de facto committing Adani to 4–5 more years of capex before cash starts flowing from that asset alone. Capex guidance: ₹25,000 crore in FY27, rising to ₹33,000 crore in FY28.

The first new unit at Korba Phase-II is expected in Q2 FY27. Mahan Phase-II aims for late FY27, though geopolitics (labour scarcity for LPG-dependent commissioning) creates slip risk. Coastal Energen (now fully consolidated) and recent acquisitions of Vidarbha and JAL assets are stitching together a larger, messier portfolio.

3. Business Model: WTF Do They Even Do?

Adani Power generates electricity from coal. That’s it.

The company operates 18,150 MW of coal-fired thermal capacity across eight states—Maharashtra, Karnataka, Rajasthan, Chhattisgarh, Gujarat, Madhya Pradesh, Tamil Nadu, Jharkhand—and sells the output under three channels: (1) long-term PPAs locked at fixed or escalating tariffs to state discoms and one industrial customer; (2) short-term (1–3 year) PPAs at variable rates; (3) merchant sales at spot rates.

By year-end FY26, 95% of capacity was PPA’d, a stunning contraction of merchant exposure from ~16% at FY26 start. Why? Because merchant rates are a game of “when does coal tumble, when does wind blow, when does the grid need baseload?” Adani decided the answer is “not often enough.” So it pivoted: secure tariff agreements, accept lower upside, sleep better.

The business is capital-intensive, debt-heavy, and operationally simple. Power plants either run (collecting PPA cash) or sit idle (collecting capacity charges). The magic—and the risk—lies in execution: building new capacity on schedule, securing PPAs before shovels move dirt, and avoiding stranded assets.

Margin is raw. In FY26, operating margin (EBITDA ÷ Revenue) was 37% nominal, but that includes ₹3,625 crore of “other income” (mainly gains on assets, forex wins, and financial income). Strip that, and operating profit on coal-to-cash drops closer to ₹19,806 crore on ₹54,240 crore sales = 36.5% OPM. Decent, but thin for a company burning ₹25K–₹33K capex per year for the next half-decade.

4. Financials Overview

Figures are consolidated, in ₹ crore.

Full-year FY26: Revenue ₹54,240 Cr (−3.5% YoY) · EBITDA ₹23,431 Cr (nominal, including other income) · PAT ₹12,834 Cr (−0.8% YoY) · Operating Margin 37%.

Q4 saw net profit spike 52% YoY to ₹4,017 crore, driven by lower tax charges and operating leverage as fixed costs (depreciation ₹1,147 Cr, interest ₹967 Cr) remained flat. Concall clarified: “Continuing EBITDA” for Q4 was ₹5,573 crore (excluding one-offs); FY26 continuing EBITDA ₹21,285 crore.

Revenue contraction reflects two headwinds. First: imported coal tariffs embedded in certain PPAs fell as global coal prices eased. Second: weak demand (0.8% growth in FY26 grid demand, monsoon-hit) pressured the small merchant component. PLF for the full year: 67%, versus 71% in FY25. Q4 PLF was higher at 74% (management cited “demand revival from March”), but still below pre-pandemic norms of 80%+.

5. Market Expectations & Historical Multiples

This section describes how the market is currently pricing the company and how that compares with its own history and peer group. It is descriptive, not predictive.

Valuation snapshot (prices referenced as of mid-June 2026, not live):

The market currently pays 33.3x earnings here. This sits above the 5-year average of 28x and in line with peer medians (31.1x for the power sector).

What’s the market pricing in? At a premium valuation in a sector of contracted growth, it’s pricing two bets. First: Adani’s ability to execute 23.7 GW capex on schedule (Korba Phase-II is on track; Mahan and Raipur face geopolitical execution risk). Second: the assumption that contracting 95% of operating capacity—and locking PPA tariffs—transforms volatile, lumpy earnings into stable, predictable cash. That’s a shift from optionality (merchant upside)