Adani Power reported a 21% rise in core operating profit for the second quarter, supported by higher sales and improved plant efficiency. The company is currently focusing on major expansion projects, including the Korba and Mahan units, to hit its 45 GW capacity target by 2032. While the company maintains a stable debt-to-profit ratio, investors are monitoring project execution timelines and power purchase agreement stability.
Adani Power reported a strong financial performance for the second quarter, characterized by a 21% year-on-year increase in adjusted EBITDA, or core operating profit. This growth was largely driven by an 11% rise in sales volumes and improved operational efficiency. The company’s plant load factor, which measures the actual output of a power plant against its maximum potential, climbed to 70.1% from 63% in the same period last year. A notable shift in the company's business model is the reduction in reliance on merchant power sales, which dropped to 15% from 24% a year ago, reflecting a move toward more predictable, long-term power purchase agreements.
Following these results, the brokerage firm Prabhudas Lilladher released a note estimating a target price of Rs 259 for the stock. The firm's analysis points to robust capacity execution and strategic power sales as the key drivers for the company's long-term outlook.
Expansion plans are currently centered on several critical infrastructure projects. The first 660 MW unit of the Korba Phase II project has successfully achieved grid synchronization, with the second unit expected to be ready by December 2026. Additionally, work on the 1,600 MW Mahan Phase II project is progressing, with commercial operations targeted for early fiscal year 2028. These projects are essential for the company's broader roadmap to achieve a total capacity of 45 GW by fiscal year 2032, which implies a compound annual growth rate of 16%.
Financially, the company continues to manage its capital spending. In the first half of fiscal year 2027, the company spent INR 125 billion on various projects. As of September 2026, the company reported a net debt of INR 458.5 billion, resulting in a net debt-to-EBITDA ratio of 2x. This ratio indicates a manageable level of leverage, though investors often track this metric to ensure the company retains financial flexibility while funding large-scale expansions.
Despite the positive operational trends, the power sector carries inherent risks. Investors monitor factors such as project commissioning delays, cost overruns, and the stability of fuel supply chains. Regulatory changes or fluctuations in power demand can also impact the profitability of capacity additions. Moving forward, the key items for stakeholders to track will be the progress of the Mahan Phase II project, the commissioning schedule of the Korba units, and the company's ability to maintain its debt metrics while sustaining profit margins in a competitive energy market.