- Net profit fell 18.9% YoY to ₹2,479.58 cr, yet sales volume rose modestly.
- Revenue slipped 8.9% YoY while EBITDA declined 3.1%.
- Debt rose 18% YoY, driven by bridge financing for capacity expansion.
- New 3,200 MW PPA in Assam adds a long‑term revenue cushion.
- Technicals show the stock perched on its 200‑day SMA, a classic support‑turning‑point.
You missed the early warning signs in Adani Power's latest numbers – and that could cost you.
Adani Power's Bottom Line: What the Numbers Really Mean
Adani Power reported a consolidated net profit of ₹2,479.58 crore for Q3 FY26, an 18.9% decline from the same quarter a year ago. Revenue from operations fell 8.9% to ₹12,451 crore, while EBITDA slipped to ₹4,636.38 crore, down 3.1% YoY. The headline loss is largely attributed to “lower income from prior periods,” meaning that adjustments from earlier years—such as settlements with regulators and interest on delayed payments—reduced the current period’s bottom line.
Despite the dip, the company highlighted that power sales volume actually increased to 23.6 billion units (BUs) from 23.3 BUs, showing that the demand side remains resilient even during an extended monsoon that typically dampens consumption.
Sector‑Wide Trends: Renewables, Regulation, and Revenue Pressure
The Indian power sector is in the midst of a structural shift. Renewable capacity is projected to cross 250 GW by 2030, pressuring traditional thermal generators to improve efficiency and cost structures. Simultaneously, the Central Electricity Regulatory Commission (CERC) and State Electricity Regulatory Commissions (SERCs) are tightening tariff frameworks, which can compress margins for generators reliant on coal‑based assets.
Adani Power’s revenue dip mirrors a broader industry pattern where higher fuel costs and regulatory settlements are eroding top‑line growth. However, the sector’s shift toward long‑term Power Purchase Agreements (PPAs) is creating a more predictable cash‑flow environment, a trend that the company is leveraging with its new 3,200 MW Assam contract.
Peer Comparison: How Tata Power and Reliance Power Are Responding
Tata Power, the largest integrated utility in India, posted a 5% YoY profit rise in the same quarter, driven by a surge in renewable generation and aggressive cost‑cutting in its thermal fleet. Tata’s debt‑to‑equity ratio remains below 0.6, reflecting a more conservative capital structure.
Reliance Power, on the other hand, posted a 12% profit decline, citing similar regulatory settlements and higher coal import costs. Reliance’s debt rose sharply after financing its 4 GW expansion, putting pressure on its credit metrics.
Compared with peers, Adani Power’s leverage (net debt of ₹38,679 crore) is higher but still manageable, given its robust liquidity and the fact that a sizable portion of its upcoming 23.7 GW expansion is already tied to PPAs.
Historical Parallel: Past Profit Dips and Market Reactions
In FY22, Adani Power experienced a 22% profit contraction after a massive settlement with the Supreme Court over tariff adjustments. The stock fell 12% on the news, but once the settlement was reflected in the balance sheet, the shares rallied 18% over the next six months as investors recognized the firm’s strong cash‑flow generation.
History suggests that short‑term earnings volatility can create buying opportunities if the underlying business fundamentals—capacity growth, PPA backlog, and liquidity—remain intact.
Technical Corner: Decoding EBITDA, Net Debt, and Bridge Financing
EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) measures operating profitability before financing and non‑cash expenses. A decline indicates pressure on core operations but does not automatically translate to cash‑flow weakness.
Net Debt is total debt minus cash and equivalents. Adani’s net debt rose to ₹38,679 crore, reflecting bridge financing used to fund capital expenditures while awaiting PPA finalization.
Bridge Financing is short‑term funding that “bridges” the gap between project outlay and long‑term financing, often at higher interest rates. The company disclosed that this financing was required to keep its aggressive capacity‑addition schedule on track.
Investor Playbook: Bull vs. Bear Cases
Bull Case: The new 3,200 MW Assam PPA secures long‑term revenue for the next decade. Capacity expansion remains on schedule, with half of the 23.7 GW already contracted. Liquidity stays strong, and the stock is near a technical support level (200‑day SMA around 130). A breakout above ₹145 could trigger a rally, rewarding patient investors.
Bear Case: Rising debt levels may pressure credit ratings if bridge financing costs rise or if PPAs are delayed. Continued regulatory tariff pressure could further squeeze margins, and a decisive break below the 200‑day SMA could push the stock toward the ₹120 support zone.
For investors weighing risk, a phased entry—starting at the current support and adding on any upside break—balances the upside potential of secured PPAs against the downside of elevated leverage.