Release Date: May 02, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Adani Power Ltd (BOM:533096, Financial) reported a significant improvement in PLF from 52% in Q4 FY '23 to 72% in Q4 FY '24.
- Power sales volume grew by 55% from 14.3 billion units to 22.1 billion units in Q4 FY '24.
- Consolidated revenues for Q4 FY '24 increased by 29% to INR13,787 crores compared to INR10,664 crores in Q4 FY '23.
- Continuing EBITDA for Q4 FY '24 grew impressively by 126% to INR5,273 crores compared to INR2,329 crores in Q4 FY '23.
- The company's credit rating improved from A to AA-, reflecting enhanced creditworthiness and financial stability.
Negative Points
- The CEO, Mr. S B Khyalia, was unable to attend the earnings call due to an exigency.
- Despite the strong financial performance, the reported profit before tax for Q4 FY '24 was INR3,558 crores, which is lower than the previous year's adjusted figure due to a one-time adjustment.
- There are ongoing regulatory issues that could potentially impact future financial performance.
- The company faces risks related to the volatility of international coal prices, which could affect fuel costs.
- Concerns were raised about the long-term viability of merchant capacity expansion given the potential rise of battery storage and renewable energy sources.
Q & A Highlights
Q: Congratulations on good numbers. My question is on new capacity. Can you talk about how much existing capacity you already have which is not tied up with PPA? And what is the plan for new capacity commissioning in terms of timeline, which is without a PPA?
A: The current operating capacity is 15.25 gigawatts. We have 1.6 gigawatts under construction at Mahan, expected to be commissioned by FY '27-'28. This capacity has a PPA for about 83% of its total capacity. We are also planning a brownfield expansion at Raigarh and are in discussions with DISCOMs for PPAs. If not successful, we can utilize the merchant market or short-term PPAs. (Shailesh Sawa, CFO)
Q: Does it have any PPA for this 1.6 gigawatts?
A: Yes, it has a PPA for about 83% of the total capacity. (Shailesh Sawa, CFO)
Q: In terms of merchant capacity expansion, it seems like an excellent strategy for the coming few years. But beyond that, do you see a risk of limited offtake as battery storage and solar generation increase?
A: We are not going aggressively into merchant capacity. We are prepared for PPA bids and will proceed step-by-step. We have options for open market sales or short-term PPAs if needed. (Shailesh Sawa, CFO)
Q: Regarding the inorganic opportunities like Coastal Energen and Lanco Amarkantak, would the company explore other big ones like KSK Mahanadi?
A: We continuously evaluate various opportunities in the market. Decisions are based on our analysis and the price at which they are available. (Shailesh Sawa, CFO)
Q: On the fuel cost, considering current spot prices and inventory, is there scope for further reduction?
A: We have three sources of coal: long-term FSAs, e-auctions, and imported coal. We don't expect significant further reductions in fuel costs. Most of our PPAs have a coal cost pass-through, so fuel price movements do not significantly affect us. (Shailesh Sawa, CFO)
Q: How much of the prior period revenue has already been received from DISCOMs?
A: For FY '23-'24, the onetime amount recognized was INR9,322 crores. Most of this has been realized, and we don't expect any large amounts further. (Shailesh Sawa, CFO)
Q: What is the capacity quantum not tied up on long-term PPA?
A: The open capacity right now, which is untied, is about 2.1 gigawatts. (Shailesh Sawa, CFO)
Q: When is the supply expected to begin under the PPA tied up with Reliance?
A: It is expected to begin sometime this month. (Shailesh Sawa, CFO)
Q: Are there any benefits in terms of cost savings from the new CERC tariff order?
A: No significant implications. Only the Udupi PPA with Karnataka is under section 62, and we are still in the previous tariff control period. (Nishit Dave, Head - Investor Relations)
Q: What is the timeline for achieving the 24 gigawatts capacity target?
A: This includes both organic and inorganic growth. We expect to reach this capacity in the next 3.5 years, considering ongoing projects and potential acquisitions. (Shailesh Sawa, CFO)
Q: What is the total CapEx for the Mahan Phase 2 project?
A: The total CapEx is around INR13,500 crores. Major packages have been ordered, including BTG with BHEL. (Shailesh Sawa, CFO)
Q: Can you talk about the economics of the new PPA tie-up with Reliance?
A: Let it get operational. We will provide complete details in Q1. (Shailesh Sawa, CFO)
Q: What is the CapEx plan for FGD in the current year?
A: All FGD orders have been placed, with a completion timeline of December '26. CapEx will be released as per the progress made by the EPC contractor. (Shailesh Sawa, CFO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
