- Net profit plunged 99% YoY to ₹5 crore.
- Revenue rose 12% YoY to ₹2,618 crore, driven by power‑supply sales.
- Added 5.6 GW of greenfield capacity, bringing total operational capacity to 17.2 GW (≈14% of India’s new solar & wind installs).
- EBITDA for power supply grew 23% YoY to ₹2,269 crore.
- Share price slipped over 14% after regulatory headlines.
You missed the warning sign in Adani Green’s latest numbers, and it could cost you.
Why Adani Green’s Profit Collapse Masks Underlying Growth
At first glance the Q3 FY26 earnings release reads like a disaster: net profit shrank from ₹474 crore to a paltry ₹5 crore, a 99% decline. Yet the same report shows revenue up 12% and EBITDA climbing 23% in the core power‑supply business. The discrepancy stems from one‑off accounting items—primarily the allocation of shareholder‑level losses and higher depreciation on newly commissioned assets. While the headline loss hurts sentiment, the operating cash flow remains robust, signalling that the business model is still generating cash before financing costs and non‑recurring charges hit the bottom line.
Sector‑Wide Renewable Trends: Is the Indian Market Overheating?
India’s renewable rollout is accelerating faster than most analysts anticipated. In FY26, the country added roughly 40 GW of solar and wind capacity, and Adani Green alone contributed 5.6 GW, or 14% of the total. This pace is driven by aggressive government targets, declining module prices, and a surge in corporate PPAs (Power Purchase Agreements). However, the rapid expansion also brings grid‑integration challenges and heightened competition for prime land and water resources. Investors should watch policy signals—such as revisions to renewable‑energy auctions—and the health of the transmission network, which could become bottlenecks that compress margins across the sector.
How Tata Power and Renewable Peers Are Positioning Against Adani Green
While Adani Green races ahead with greenfield projects, peers like Tata Power and ReNew Power are focusing on asset optimization and hybrid‑asset models. Tata Power, for instance, has doubled down on solar‑plus‑storage deals, aiming to lock in higher capacity‑utilisation factors (CUFs) and mitigate curtailment risk. ReNew Power is expanding its wind portfolio in southern India, where wind density offers superior capacity factors. Both firms are also leveraging long‑term PPAs to smooth revenue streams, a strategy that cushions them against the kind of profit volatility seen at Adani Green. The divergent playbooks suggest a market where scale alone is insufficient; operational efficiency and diversified technology stacks are becoming decisive competitive edges.
Historical Parallel: The 2013 Solar Boom and Its Aftermath
India experienced a comparable surge in 2013‑14 when solar installations exploded following a steep drop in module prices. Companies that raced to add capacity without securing PPAs or adequate financing soon faced cash‑flow squeezes, leading to a wave of defaults and a temporary dip in sector valuations. Those that paired capacity growth with off‑taker contracts and prudent debt structures emerged stronger. The current environment mirrors that past cycle, but with two key differences: financing costs are lower due to greener capital markets, and AI‑driven O&M platforms—like the one Adani Green runs with its infra subsidiary—are improving plant availability and reducing operational expenditures.
Technical Corner: Decoding EBITDA, PPA Commitments and Greenfield Capacity
EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) measures a company’s operating profitability before accounting for capital structure and non‑cash charges. A rising EBITDA, as seen in Adani Green’s power‑supply segment, indicates that core operations are generating more cash. PPA commitments are long‑term contracts where utilities or corporations agree to purchase a set amount of renewable electricity at a fixed price. The fact that 79% of Adani Green’s 9‑month generation met its annual PPA commitment suggests strong revenue visibility. Greenfield capacity refers to brand‑new, never‑operated projects; adding 5.6 GW of greenfield capacity expands the asset base but also introduces upfront capital outlays and ramp‑up risk.
Investor Playbook: Bull vs Bear Scenarios
Bull case: The profit dip is a one‑off accounting shock, while revenue, EBITDA, and capacity additions remain on an upward trajectory. Continued government support for renewables, coupled with the company’s progress on the world‑largest renewable installation in Khavda and a forthcoming battery storage project, could unlock higher margins and a stronger balance sheet. If the SEC issue resolves without material penalties, the stock may rally on the back of operational momentum, offering a compelling entry point at a discounted valuation.
Bear case: Persistent regulatory headwinds—exemplified by the recent SEC filing—could delay project timelines, increase compliance costs, and erode investor confidence. The steep profit fall may signal deeper structural issues, such as under‑priced PPAs or over‑leveraged greenfield expansion. A slowdown in renewable subsidies or grid bottlenecks could compress returns across the sector, leaving Adani Green exposed due to its sizable capital commitments.
In summary, the headline loss should not be the sole driver of your decision. Focus on cash‑flow generation, capacity pipeline, and the macro‑policy environment to gauge whether the current price offers a risk‑adjusted upside or a warning sign of deeper trouble.