Adani Power Q2 FY26: Revenue Edges Up, EBITDA Steady and Profit Down ~11% on Higher Costs & Taxes

Adani Power Q2 FY26: Revenue Edges Up, EBITDA Steady and Profit Down ~11% on Higher Costs & Taxes

Adani Power delivered a modestly better quarter in terms of topline and stable operations, but bottom-line profit declined owing to higher expenses and tax burden. Electric-power sales volume increased, revenue rose slightly, and EBITDA remained steady, showing core business resilience. However, net profit at ₹ 2,906-2,953 crore declined by about 11% YoY, underlining pressure from cost inflation and depreciation on recent capacity additions.

*Key Highlights*
* Total Revenue: ₹ 14,308 crore in Q2 FY26, up +1.7% YoY (vs ₹ 14,063 crore in Q2 FY25)
* Electric-power sales volume (consumption by customers): 23.7 BU (billion units), up +7.4% YoY (vs 22 BU in Q2 FY25)
* EBITDA: ₹ 6,001 crore in Q2 FY26 (vs ₹ 6,000 crore in Q2 FY25)
* Net Profit (PAT): ₹ 2,906 – 2,953 crore for Q2 FY26, down ~11% YoY (from ~₹ 3,332–3,331.8 crore in Q2 FY25)
* Earnings Per Share (EPS): ₹ 1.53 in Q2 FY26 (from ₹ 1.66 in Q2 FY25)
* New Power Purchase Agreements (PPA) added: 4.5 GW of long-term PPAs under SHAKTI scheme (2,400 MW, Bihar; 1,600 MW, Madhya Pradesh; 570 MW, Karnataka) by Oct 2025
* Total capacity (post-acquisition of Vidarbha Industries Power Ltd under Corporate Insolvency Resolution): 18,150 MW as on Q2 FY26

*Revenue & Profit Analysis*
Revenue grew only marginally (+1.7% YoY), reflecting slightly improved power sales volume. The increase in volume (electricity sold) helped counter the impact of softened merchant tariffs and softer demand under seasonal and weather pressures. EBITDA remained stable at ~₹ 6,001 crore, indicating that operational costs and efficiencies held up despite volatility in fuel and input costs.
However, the bottom line took a hit: net profit fell by ~11%, primarily because of higher depreciation (on new plants and capacity additions) and increased tax expense. This suggests that while operations are stable, the returns on newer capacity are yet to fully overcome cost and depreciation drag.

*Business & Operational Performance*
* Power Sales & Volume: The company reported 23.7 BU of power sales in Q2, a healthy +7.4% YoY growth despite monsoon-related demand softness and a high base quarter. This underscores steady demand from DISCOMs and industrial customers under long-term PPAs.
* PPA Book & Capacity Expansion: Securing 4.5 GW of fresh long-term PPAs under the SHAKTI scheme is a key positive. It improves visibility on future demand and revenue flows. Post the resolution-process acquisition, total generation capacity stands at ~18,150 MW, giving Adani Power a sizeable base for long-term generation and supply.
* Cost & Tariff Environment: Despite lower merchant-tariff realisation and import-coal cost volatility, the company maintained stable EBITDA, implying moderate fuel and input cost control.
* Balance-sheet moves & Consolidation: The quarter saw consolidation: several wholly-owned subsidiaries (e.g. power generation/ fuel management entities) were merged under Adani Power (appointed date April 1, 2025), which may improve administrative efficiency and reduce inter-company overhead.

*Risk Factors to Monitor*
* Tariff and Demand Volatility: Merchant-tariff volatility and demand fluctuations (especially due to monsoon, fuel cost or DISCOM payment delays) can affect realisation.
* High Depreciation & Interest Costs: Recent capacity additions increase depreciation and interest burden, so sustained utilisation and long-term PPAs are key for return on capital.
* Fuel & Coal Price Risk: As a thermal-power generator dependent on coal/imported fuel, global coal price swings or supply disruptions could impact margins.
* Capex & Debt Risk: Further expansions to reach 42 GW target by 2031–32 means more capex and possible debt.

*Management Commentary & Strategic Outlook*
According to the company, the quarter demonstrates Adani Power’s “robust and stable performance” even amid weather-driven demand fluctuations and lower merchant tariffs. The management highlights the securing of fresh long-term PPAs (4.5 GW) under the SHAKTI scheme as a strong signal of future demand stability.
The company is also working on its long-term growth goal: expanding capacity toward ~42 GW by FY 2031–32, backed by acquisition of stressed assets and future project pipelines. The consolidation of subsidiaries under the parent company is meant to simplify operations and reduce overhead.

*Conclusion*
Adani Power’s Q2 FY26 is a steady yet muted quarter. On one hand, power sales volume increased, revenue rose modestly and core operations held up, reflecting resilience in demand and execution. On the other hand, profitability dipped by ~11% because of higher depreciation, taxes and cost pressures, highlighting that scaling up capacity brings fixed-cost burden. In short, Adani Power remains a high-potential but cyclical power play, suitable if you’re comfortable with sectoral & commodity fluctuations, but needs careful monitoring of demand, costs and regulatory/ fuel risks.

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