As the season of quarterly results unfolds, one stock stands out amidst the tumultuous market movements – Adani Power. With a staggering market capitalization of ₹209,547 crore, this stock has captured the attention of investors far and wide. The convergence of technical indicators, like the EMA crossover, signaling buying potential, coupled with the recent surge in Q3 profits, paints a promising picture for potential investors. Let’s delve deeper into whether Adani Power warrants a place in your investment portfolio.
Daily Chart of the Share
A glance at the daily chart reveals a remarkable uptrend in Adani Power’s stock, boasting returns of over 280 percent in less than a year.
This remarkable surge can be attributed to several factors, including the company’s forward-thinking strategies, robust fundamentals, commencement of new projects, and heightened interest from DIIs (Domestic Institutional Investors). As of January 25, 2024, Adani Power closed at ₹543.30. While the stock briefly tested below the 20 EMA (Exponential Moving Average) line, depicted in blue, it swiftly rebounded. Presently, the stock is consolidating, forming a triangular pattern. Sustained price levels, accompanied by increased volumes and strong bullish candle formations, could signal compelling movements ahead.
Adani Power Q3 Results FY2023-24
In the third quarter of the fiscal year 2023-24, Adani Power reported a staggering surge in its consolidated net profit, soaring to ₹2,737.96 crore from ₹8.77 crore in the corresponding quarter of the previous fiscal year. This remarkable growth is mirrored in its revenue from operations, which climbed to ₹12,991.44 crore from ₹7,764.41 crore year-on-year. Total income for the December quarter surged to ₹13,355 crore compared to ₹8,290 crore in the same period a year ago.
According to company spokesperson Khyalia, Adani Power’s strategically positioned power plants, efficient capacity allocation between PPAs (Power Purchase Agreements) and merchant capacities, coupled with prowess in fuel management, logistics, and power plant O&M (Operations and Maintenance), have facilitated the company in meeting escalating power demands and achieving robust profitability. Improved liquidity has enabled debt reduction, further strengthening the company’s financial position.
During the third quarter and the nine-month period of FY24, Adani Power witnessed increased volumes contributed by its Mundra, Udupi, Raipur, and Mahan plants, alongside the incremental contribution from the Godda power plant, which has emerged as a vital component of Bangladesh’s power supply ecosystem.
For the nine-month period spanning April to December 2023, Adani Power reported a net profit of ₹18,092 crore, marking a substantial 230 percent surge from ₹5,484 crore in the corresponding period of FY23.
Additional Key Highlights
In addition to its stellar performance in Q3 FY2023-24, Adani Power boasts several other noteworthy achievements:
- Debt Reduction: Adani Power has undertaken significant measures to reduce its debt burden, enhancing its financial stability and resilience in the face of market uncertainties.
- Impressive Profit Growth: Over the past five years, Adani Power has delivered a remarkable 48.1% Compound Annual Growth Rate (CAGR) in profits, underscoring its consistent profitability and growth trajectory.
- Strong Return on Equity (ROE): With a three-year ROE of 34.3%, Adani Power demonstrates a commendable track record of generating returns for its shareholders, reflecting efficient capital utilization and operational effectiveness.
- Promoter Holding Increase: The company’s promoters have exhibited confidence in its prospects, as evidenced by a 1.73% increase in promoter holding over the last quarter. This vote of confidence from insiders signals a positive outlook for Adani Power’s future performance.
- Improved Working Capital Management: Adani Power has successfully optimized its working capital requirements, reducing the days required from 103 days to 74.2 days. This efficient management of working capital enhances liquidity and operational efficiency, further strengthening the company’s financial position.
As Adani Power continues to break records and expand its footprint, the question arises: Should you invest in this stock? While past performance is not indicative of future results, the company’s visionary leadership, strong financials, and strategic initiatives suggest a positive outlook. As always, potential investors are advised to conduct thorough research, considering risk factors and market conditions before making investment decisions.
Disclaimer: (This information is provided solely for informational purposes. It is important to note that investing in the market or a business idea involves market risks. Before investing money as an investor/ owner/ partner, always consult an expert. DNP News Network Private Limited never advises to invest money on stocks or any specific business idea. We will not be liable for any financial losses.)
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