At a Glance
Adani Power (APL) flexed its power muscles in Q1 FY26 with a net profit of ₹3,305 Cr despite a 15.5% YoY decline. Revenue fell to ₹14,109 Cr (-5.7%), but operating margins stayed a fiery 40%. Meanwhile, Gautam Adani served up two investor candies: a 1:5 share split and the acquisition of a 600 MW Vidarbha power plant. The stock dipped 3.6% (profit booking, anyone?), yet fundamentals remain strong with ROE of 25.7%.
Introduction
Adani Power isn’t just India’s largest private thermal power producer; it’s the poster child for scaling with debt and delivering with cash flows. FY25 was a blockbuster with ₹12,750 Cr profit, but Q1 FY26 cooled the party. Still, with a share split and fresh capacity, the group signals “we’re just warming up.”
But is this a power play or an overcharged stock waiting for a voltage drop? Let’s flip the switch.
Business Model (WTF Do They Even Do?)
APL operates power generation assets across multiple states:
- Uses thermal (coal-based) plants as its backbone.
- Sells power via long-term PPAs with SEBs & industries.
- Merchant power sales provide pricing flexibility.
- Backed by in-house coal logistics, ensuring cost control.
Add renewables in the mix? Not yet their core focus, but with the Adani empire pushing green energy, expect synergies later.
Financials Overview
Q1 FY26:
- Revenue: ₹14,109 Cr (↓5.7% YoY)
- EBITDA: ₹5,685 Cr (↑13% QoQ, 40% margin)
- PAT: ₹3,305 Cr (↓15% YoY)
- EPS: ₹8.78
FY25 Recap:
- Revenue: ₹56,203 Cr
- PAT: ₹12,750 Cr
- Margins: OPM 38%, PAT 23%.
Commentary: Revenue dropped, but margins stayed muscular. EPS annualized = ₹32, implying a P/E of 17x, reasonable vs. growth prospects.
Valuation
At CMP ₹566, market cap ₹2.18 Lakh Cr.
Fair Value Calculation
- P/E Method:
EPS FY25 ₹33.55 × fair multiple 20 → ₹650–₹700. - EV/EBITDA:
EV ~₹2.3 Lakh Cr; EBITDA FY25 ₹21,418 Cr → EV/EBITDA 10.7x (fair). - DCF:
Conservative growth 10%, WACC 9% → DCF value ₹550–₹600.
Fair Value Range: ₹550 – ₹700 (current price near lower band, stock split may re-rate).
What’s Cooking – News, Triggers, Drama
- 1:5 Stock Split → improves liquidity, attracts retail.
- 600 MW Vidarbha Plant Acquisition → capacity boost.
- Steady Margins despite revenue dip.
- No Dividend yet; Adani prefers reinvestment.
- Merchant Tariff Fluctuations could hit future earnings.
Balance Sheet
| Particulars (₹ Cr) | Mar 23 | Mar 24 | Mar 25 |
|---|---|---|---|
| Assets | 85,821 | 92,009 | 112,918 |
| Liabilities | 85,821 | 92,009 | 112,918 |
| Net Worth | 29,876 | 42,899 | 56,347 |
| Borrowings | 42,350 | 34,862 | 39,495 |
Remark: Debt still heavy but under control; net worth rising faster.
Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating CF | 8,431 | 14,170 | 21,501 |
| Investing CF | 1,545 | 3,481 | -17,142 |
| Financing CF | -10,408 | -16,864 | -5,175 |
Comment: Operations are a cash machine; investing outflows reflect expansion.
Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE | 16% | 32% | 25.7% |
| ROCE | 16% | 32% | 22.5% |
| P/E | 27x | 16x | 17x |
| PAT Margin | 28% | 37% | 23% |
| D/E | 1.0 | 0.8 | 0.7 |
Remark: Ratios are sexy; leverage dropping, returns high.
P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 38,773 | 50,351 | 56,203 |
| EBITDA | 10,096 | 18,228 | 21,418 |
| PAT | 10,727 | 20,829 | 12,750 |
Remark: FY24 was a peak; FY25 profit dipped due to base effect & lower other income.
Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| Adani Power | 55,357 | 12,142 | 17 |
| Tata Power | 65,478 | 3,739 | 33 |
| Torrent Pwr | 29,165 | 2,824 | 23 |
| CESC | 17,340 | 1,378 | 16 |
Remark: Adani is king of profits; peers trail on margins & scale.
Miscellaneous – Shareholding, Promoters
- Promoters: 74.96% (steady).
- FIIs: 12.46% (stable).
- DIIs: 1.76% (rising).
- Public: 10.82%.
Promoter Bio: Gautam Adani continues to fuel growth—whether regulators like it or not.
EduInvesting Verdict™
Adani Power remains a cash-generating giant in India’s power sector. The Q1 dip is temporary; margins are intact, and expansion is on track. The share split and acquisition signal aggressive growth.
SWOT
- Strengths: Market leader, strong cash flows, high ROE.
- Weaknesses: High debt, dependence on coal.
- Opportunities: Renewable integration, merchant price spikes.
- Threats: Regulatory risks, coal price volatility.
Conclusion:
APL is still a powerhouse with a balanced risk-reward profile. The stock split may bring short-term buzz, while long-term investors can expect steady voltage. Just don’t expect dividends—they’d rather build more plants.
Written by EduInvesting Team | 01 August 2025
SEO Tags: Adani Power, Q1 FY26 Results, Stock Split, Power Sector Analysis
