Adani Power Ltd Q3 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Mohit Kumar - ICICI Securities Ltd - Analyst : Hi, good afternoon, sir. And thanks for the opportunity. My first question is, sir, can you please help us with the time lines for 1.4 gigawatt PPA, which is signed at MSEDCL, when it is going to kick up? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 30, 2025 / 6:30AM, ADAN.NS - Q3 2025 Adani Power Ltd Earnings Call

Question: Mohit Kumar - ICICI Securities Ltd - Analyst : My question was, what is the time lines for 1.4 gigawatt PPA is signed with MSEDCL? What is the time line which you have to start supplying?

Question: Mohit Kumar - ICICI Securities Ltd - Analyst : Maharashtra, yeah.

Question: Mohit Kumar - ICICI Securities Ltd - Analyst : Understood, sir. And on the Lanco, I think you acquired in this quarter. Is that right understanding? And secondly, what is the -- when do you expect this 1.3 gigawatt be operational in your opinion? And how much is the CapEx which we need to incur?

Question: Mohit Kumar - ICICI Securities Ltd - Analyst : Understood, sir. And have you acquired the Lanco completely in this quarter? Are you -- is that right understanding?

Question: Mohit Kumar - ICICI Securities Ltd - Analyst : Understood. And sir, can you please explain the onetime booking of this INR14 billion and the nature of it? In the accounts, we see only 5C, which talks about INR880 crore of INR821.2 crore of recognition towards tariff compensation claims.

Question: Mohit Kumar - ICICI Securities Ltd - Analyst : And this is note number seven, sir, which talks about the company has claimed compensation of alternate costs for 1.2 gigawatt of supplementary PPA Haryana Discoms. It speaks about INR782 crore of recognized revenues. Is this included INR[300 crore]?

Question: Mohit Kumar - ICICI Securities Ltd - Analyst : This is only 50%. The 50% claim is still there?

Question: Mohit Kumar - ICICI Securities Ltd - Analyst : Understood, sir. Thank you, Mr. Dilip.

Question: Puneet Gulati - HSBC Mutual Funds - Analyst : Yeah, thank you so much. My question is, again, just on this Haryana government recognition of INR782 crore. So INR916 crore was not accounted as income earlier in our P&L at all. Is that understanding correct? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 30, 2025 / 6:30AM, ADAN.NS - Q3 2025 Adani Power Ltd Earnings Call

Question: Puneet Gulati - HSBC Mutual Funds - Analyst : Understood. So how much more should we expect from this going into next few quarters?

Question: Puneet Gulati - HSBC Mutual Funds - Analyst : Okay. My second question is in your presentation, you talked about the PPA for MSEDCL signs for 1,500 megawatts. My understanding was the 2,000 megawatt thing. So is 500 still to go or is it scrapped?

Question: Puneet Gulati - HSBC Mutual Funds - Analyst : The MSEDCL PPA.

Question: Puneet Gulati - HSBC Mutual Funds - Analyst : Understood. And if you can also talk about which states are you expecting to get bids from for your future tie-ups?

Question: Puneet Gulati - HSBC Mutual Funds - Analyst : Understood. That's -- and lastly, the status of your Bangladesh power plant? What's happening there?

Question: Puneet Gulati - HSBC Mutual Funds - Analyst : Okay. Understood. That's helpful. And lastly, on the merchant power side, are you seeing lower tariffs, especially during the solar hours? And if you would -- and do you shut down your plants during solar hours? Or are you able to run it during that time also?

Question: Puneet Gulati - HSBC Mutual Funds - Analyst : So my question is how easy is it to shut down during solar hours and restart in the evening? Or do you continue to run during solar as well?

Question: Puneet Gulati - HSBC Mutual Funds - Analyst : Understood. That's all, thank you so much and all.

Question: Bharat Shah - ASK Investment Managers - Analyst : Good morning Khyalia-ji and Dilip-ji. I'm a little confused about your initial comments about third quarter numbers being strong and robust. But barring the volumes having gone up 8% in the third quarter compared to the last year third quarter, our operating revenues have declined 3%, continuing EBITDA has declined 5% and profit before tax from the continuing activity has declined 18%. So I couldn't correlate what that robustness we were referring to. Or did I hear wrong? I don't know, but I'm a bit confused on this.

Question: Bharat Shah - ASK Investment Managers - Analyst : So Dilip, broadly, volumes have grown up, but realizations have dropped. Finance and depreciation costs have gone up because of the acquired assets. But core performance broadly is similar to the last quarter -- to the similar quarter last year. It is not higher, but it's similar. It's higher in terms of the volumes, slightly lower in terms of the profits.

Question: Bharat Shah - ASK Investment Managers - Analyst : I understand. This was not there in the presentation. So which now makes it very clear. Bangladesh, what are the outstanding dues as of the moment? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 30, 2025 / 6:30AM, ADAN.NS - Q3 2025 Adani Power Ltd Earnings Call

Question: Bharat Shah - ASK Investment Managers - Analyst : I understand. This was not there in the presentation. So which now makes it very clear. Bangladesh, what are the outstanding dues as of the moment?

Question: Bharat Shah - ASK Investment Managers - Analyst : Right. And that INR100 million pending reconciliation, obviously, is hopefully not forgotten, right?

Question: Bharat Shah - ASK Investment Managers - Analyst : Got it. But that INR100 million pending reconciliation also will get reconciled and duly recovered, right?

Question: Bharat Shah - ASK Investment Managers - Analyst : Right. And I suppose the next year should be a pretty strong year because I think volumes will be much higher in '26 compared to the current year, which is going by. And overall other fixed costs and compared to that realization, I think overall performance of the business should be even a lot stronger in the '26. Like in the nine months of the current year, the core performance is very strong. I suppose next year with the increased volume, overall performance should be much, much better?

Question: Bharat Shah - ASK Investment Managers - Analyst : Thank you, Khyalia sir. And thank you Dilip-ji.

Question: Nikhil Nigania - Bernstein - Analyst : Thank you for taking my question. My question is on the 12.5 gigawatt pipeline. So am I correct to understand the BTG orders have been placed for the entire quantum? And then accordingly, but do we have PPA visibility? I understand only for the Maharashtra contract and with Reliance REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 30, 2025 / 6:30AM, ADAN.NS - Q3 2025 Adani Power Ltd Earnings Call Industries. Other than that, then what is the plan in terms of split between merchant and PPA in terms of capacity? And B, have we achieved financial closure for this entire quantum?

Question: Nikhil Nigania - Bernstein - Analyst : Appreciate your response. My second related question is, I understand the need for states to sign baseload PPAs with coal plants. But given this incremental trend of solar plus 4 hour battery, solar plus 2 hour battery, which is coming at INR3, INR3.5, do you see any risk to the ordering so many plants without PPAs?

Question: Nikhil Nigania - Bernstein - Analyst : Understood. I'm guessing you see the same challenge with solar plus pump storage as well that when cloud cover is there, you could have lower generation. That's why you think thermal/nuclear is the answer for baseload. Am I correct to understand that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 30, 2025 / 6:30AM, ADAN.NS - Q3 2025 Adani Power Ltd Earnings Call

Question: Nikhil Nigania - Bernstein - Analyst : Fair point. One last question, if I may add, that's a bit more near term. Section 11, do you see it continuing further now that demand has softened or as you highlighted earlier, do you expect demand to revive and shortages again to come back in the summer months. Hence, you see that continuing going forward?

Question: Nikhil Nigania - Bernstein - Analyst : Got it. Thanks for those are my questions. Thanks for asking that.

Question: Bharanidhar Vijayakumar - Avendus Spark Institutional Equities - Analyst : Yes, good afternoon. Am I audible?

Question: Bharanidhar Vijayakumar - Avendus Spark Institutional Equities - Analyst : Yeah. Is it better now. Sir?

Question: Bharanidhar Vijayakumar - Avendus Spark Institutional Equities - Analyst : So like my question is on the power demand growth in the long term. Now even in your presentation, the power demand growth for the country by 2032, is 390 gigawatts, assumes a high growth rate of 7%. But in the last few quarters, it has come down. And what is the confidence we have that if the existing demand growth of 5% continues that the requirement for baseload thermal capacity will still be there and hence, there will be incremental demand or PPAs that is required on the thermal side? If the growth is subdued, then wouldn't the incremental capacity requirement on the thermal side not be there? Your views on that? Thanks.

Question: Bharanidhar Vijayakumar - Avendus Spark Institutional Equities - Analyst : Okay. And I mean, the situation will get worse if there are many battery and pump storage projects, which are also right now under construction, are under construction. So my worry is whether the existing pipeline of projects that have been announced by both Adani, NTPC and others, wouldn't that be sufficient for the next, say, seven, eight years?

Question: Bharanidhar Vijayakumar - Avendus Spark Institutional Equities - Analyst : Sure. Loud and clear. Thank you so much.

Question: Bharat Shah - ASK Investment Managers - Analyst : Dilip, you mentioned earlier to some question that you will not need to tie up any funds for closure of any projects or it doesn't have to be tied down to a particular project because of adequate cash availability. But I thought issue is on the other way around. We will have a lot of surplus cash over the period of time. Our current EBITDA run rate is almost about $3 billion per annum and pre-tax profit is almost $2 billion. And if -- is our capacity target to reach 30 gigawatt there over five year time frame, I think we'll have a lot of actually additional cash flow available over a period of time. So the question actually to my mind is how do you propose to utilize the cash, which will be excess, rather than whether you will have cash flow need to be funded through borrowing?

Question: Bharat Shah - ASK Investment Managers - Analyst : Sure, that answers it. Well, thank you.