Adani Power Limited is the power business subsidiary of Indian conglomerate Adani Group with head office at Ahmedabad , Gujarat . The company is India’s largest private power producer, with total capacity of 10,440 MW and also the largest solar power producer of India with a capacity of 688 MW.
Adani Power board has recently passed a resolution to hive off its flagship Mundra power station to its subsidiary so that it can focus on investment and power generation separately. Adani Group had lost all its investment in the debt-ridden Mundra thermal power plant, the country’s largest coal-fired project.
On the financial front, Adani power posted a 6.63 per cent decrease in its revenue to ₹ 2,682.07 crore in Q1FY18 from
₹ 2,872.79 crore in Q1FY17. Also, the company’s PBDT declined from ₹ 150.77 crore in the first quarter of FY17 to ₹ -236.89 Crore on a yearly basis. The company’s net profit also declined from ₹- 5.28 crore in Q1FY17 to ₹- 515.85 crore in Q1FY18.
On an annual basis, the company’s revenue rose 16.85 per cent to ₹ 11,017.97 crore in FY17 compared to the previous fiscal. The company’s PBDT declined 628.86 per cent to ₹ -5,016.85 crore in FY17 on yearly basis. The company’s profit after tax also declined from ₹ 5.62 crore in FY16 to ₹ -6,054.34 crore in
The company’s financial performance has not been up to the mark with decline in PBDT and PAT. Company has low interest coverage ratio. Promoter’s stake has also decreased.
Promoters have pledged a considerable part of their holding. Company has a low return on equity of -10.98 per cent for last 3 years. Considering all these factors, we recommend our reader-investors to EXIT the stock.
Should I buy, hold or Sell the share of Adani Power? - Roshni Jain