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Adani Power Ltd. Stock Analysis

Mid Cap
Evaluated by 4078 users | BSE: 533096 | NSE: ADANIPOWER |
Power Generation/Distribution
The Company was incorporated as Adani Power Limited on August 22, 1996 and received a certificate of commencement of business on September 4, 1996. The Company became a private limited company on June 3, 2002 and the name of the Company was subsequently changed to Adani Power Private Limited....

Analysis of Financial Track Record

Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end
Financial track record gives insight into the company's performance on key parameters over the past ten years. MoneyWorks4me’s proprietary colour codes make it easy for retail investors to gauge the company’s past performance.
Adani Power Ltd. has not performed well majority of the past ten years indicating its past ten year financial track record is not good
Value Creation
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Capital Employed 3.83%1.62%-1.6%9.27%4.32%6.39%-4.04%1.27%2.73%0.81%
Growth Parameters
Growth Parameters Colour Code Guide
Net Sales (Rs. Cr.) 2,1063,9516,33310,85310,62512,87510,8688,1212,4041,005
Y-o-Y Gr. Rt.-87.6%60.3%71.4%-2.1%21.2%-15.6%-25.3%-70.4%-58.2%
Adjusted EPS (Rs.) 2.43-0.43-72.49-1.220.29-9.19-2.8-0.56-1.61
Y-o-Y Gr. Rt.--117.7%NANA-149%NA-3269%NANANA
Book Value per Share (Rs.) 2927.0318.9326.7326.6327.0712.1224.7323.6718.6
Adjusted Net Profit 529-93.6-1,676714-35297.6-3,545-1,081-215-620
Net Op. Cash Flow (Rs. Cr.) 1,4505411,8203,3862,3931,869659-333-16794.7
Debt to Cash Flow from Ops 11.9649.8215.437.479.9914.4541.36-28.8-116.62151.82
Standalone financials take only the parent company into account while consolidated financials take into account financials of the parent company as well as of all its subsidiaries. In most companies consolidated financials should be used for analysis.
Adani Power Ltd. should be analysed on a Standalone basis
CAGR
CAGR Colour Code Guide
  9 yrs 5 yrs 3 yrs 1 yr
Net Sales -7.9%-37.6%-54.8%-58.2%
Adjusted EPS -195.5%NANANA
Book Value per Share -4.8-6.915.4-21.4
Share Price -9.2% 3.1% 2.7% -45.1%
Key Financial Parameter
Performance Ratio Colour Code Guide
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Equity (%) 8.72-1.52-31.411.49-4.541.17-51.76-15.21-2.31-7.61
Operating Profit Margin (%) 58.9134.9714.6232.9723.4727.511.6310.930.01-1.19
Net Profit Margin (%) 25.1-2.37-26.476.58-3.310.76-32.61-13.31-8.96-61.67
Debt to Equity 2.744.576.23.293.132.995.8412.142
Working Capital Days 4224483782593483564124941,6792,665
Cash Conversion Cycle -229223-13-15663-5-15-80
Entity Percentage Holding
Promoters 74.97%
Institutions 18.38%
Non-Institutions 6.65%
Pledged *32.0532.0529.3430.2029.3229.3229.9032.4631.6430.05
* Pledged shares as % of Promoter's holding (%)

MoneyWorks4Me analysed the past 10-year performance of Adani Power Ltd. and arrived at the following conclusion:

Past 10 year's financial track record indicates that Adani Power Ltd. is a below average quality company. However, for specific investment actions please connect with your investment advisor.

The 5-year analysis of Adani Power Ltd.'s performance infers:

Adani Power Ltd. earnings have grown by 0%, whereas share price has appreciated 3.1% CAGR over the past five years, indicating the company's share price is likely overvalued. However, for specific investment actions please connect with your investment advisor.

We analysed the performance of Adani Power Ltd. share prices over the last 10 years. Here is what we found out:

Adani Power Ltd. share price has appreciated -12.3% annually over the past ten years.

The Company was incorporated as Adani Power Limited on August 22, 1996 and received a certificate of commencement of business on September 4, 1996. The Company became a private limited company on June 3, 2002 and the name of the Company was subsequently changed to Adani Power Private Limited. The RoC issued a fresh certificate of incorporation on June 3, 2002.The company is promoted by Gautam S. Adani, Rajesh S. Adani and Adani Enterprises Limited.

The company

The Company was incorporated as Adani Power Limited on August 22, 1996 and received a certificate of commencement of business on September 4, 1996. The Company became a private limited company on June 3, 2002 and the name of the Company was subsequently changed to Adani Power Private Limited. The RoC issued a fresh certificate of incorporation on June 3, 2002.The company is promoted by Gautam S. Adani, Rajesh S. Adani and Adani Enterprises Limited.

The company was, thereafter, converted into a public limited company on April 12, 2007 and the name of the company was changed to Adani Power Limited. Upon ceasing to be a private limited company, the word private was deleted through a special resolution at the EGM of the company held on March 28, 2007. The fresh certificate of incorporation consequent to the change of name was granted by the RoC to the Company on April 12, 2007.

Adani Enterprises (AEL), one of the promoters of the company was incorporated under the Companies Act on March 2, 1993 as Adani Exports Limited. Its name was subsequently changed to Adani Enterprises Limited on August 10, 2006. AEL is engaged in the business of trading in goods, import and export of goods, carrying out mining activities, and acquisition of land, other property and real estate for developmental activities.

The company is a part of the Adani Group, a power project development company, which is developing, and will operate and maintain, power projects in India. It has four thermal power projects under various stages of development, with a combined installed capacity of 6,600 MW. In addition, it is also planning to develop two power projects with a combined installed capacity of 3,300 MW. The company intends to sell the power generated from these projects under a combination of long-term power purchase agreements to industrial and state-owned consumers and on merchant basis.

The company intends to capitalize on the emerging opportunities in the Indian power generation sector, which are being driven by the current and expected demand and supply imbalance in India. Notwithstanding various policy initiatives within India to diversify fuel mix, with the limited reserve potentiality of petroleum and natural gas, eco-conservation, restrictions on hydroelectric power projects, and the geopolitical perception.

Business area of the company:

The company has been established to carry on the business of generation, accumulation, distribution and supply of power and to generally deal in electricity and to explore, develop, generate, accumulate, supply and distribute or to deal in other forms of energy from any source whatsoever.

Subsidiaries of the company:

The company has five subsidiaries:

Adani Power Maharashtra Limited

Adani Power Maharashtra Limited (“APML”) was incorporated as Adani Power Maharashtra Private Limited on April 11, 2007 under the Companies Act in Ahmedabad. Adani Power Maharashtra Private Limited became a public company on May 16, 2008 and the name was subsequently changed to APML. APML is engaged in the business of generation, accumulation, distribution and supply of and to generally deal in electricity. The Tiroda Power Project is being executed by APML.

Adani Power Rajasthan Limited

Adani Power Rajasthan Limited (“APRL”) was incorporated as Adani Power Rajasthan Private Limited on January 25, 2008 under the Companies Act in Ahmedabad. Adani Power Rajasthan Private Limited became a public company on April 29, 2008 and the name was subsequently changed to APRL. The company is engaged in the business of generation, accumulation, distribution and supply of and to generally deal in electricity.

Adani Power Dahej Limited

Adani Power Dahej Limited (“APDL”) was incorporated as Dahej Power Private Limited under the Companies Act on February 6, 2006. APDL became the subsidiary on December 15, 2007. Its name was subsequently changed to Adani Power Dahej Limited on May 16, 2008. APDL is engaged in the generation, accumulation, distribution and supply of electricity.

Mundra Power SEZ Limited

Mundra Power SEZ Limited (“MuPSEZL”) was incorporated under the Companies Act on October 27, 2008 in Ahmedabad. The business of the company is to develop a Special Economic Zone for establishment of electric and power distribution, industrial and commercial undertaking by constructing roads, buildings, structures, arranging water supply, electricity supply and other energy sources, developing sewage systems, effluent treatment systems, social infrastructure and provide all other amenities and facilities as may be necessary for establishment of special economic zone subject to approval, if required.

Adani Power (Overseas) Limited

Adani Power (Overseas) Limited (“APOL”) was incorporated in accordance with the Offshore companies regulations of Jebel Ali Free Zone, 2003 with a limited liability on October 13, 2008. The principal activities for which the offshore company is established is general trading, investment, investments in properties worldwide, property development and investment in properties in Dubai World, Nakeel, Emaar, Dubai Holdings or any other approved projects by Jebel Ali Free Zone and investment in development or acquisition of assets in regards to power generation, mining shipping etc.and to support various activities of the parent company and its other subsidiaries that are engaged in business of generation and distribution of power.

Milestones:

  • August 22, 1996 -Incorporation of the company.
  • September 20, 2006 -Execution of Loan agreement (financial closure) with Lenders of Mundra Phase I Power Project.
  • December 8, 2006- Coal supply agreement with AEL for Mundra Phase I Power Project, which was extended to Mundra Phase II Power Project through amendment agreement dated August 10, 2007.
  • February 2, 2007 -Execution of PPA with GUVNL for 1,000 MW.
  • February 6, 2007- Execution of PPA with GUVNL for 1,000 MW.
  • June 27, 2007 -Execution of subordinate loan agreement for Mundra Phase I and II Power Project.
  • July 25, 2007 - Execution of Loan agreement (financial closure) with Lenders of Mundra Phase II Power Project.
  • September 28, 2007 -Execution of Investment Agreement with 3i Power Investment A1 Limited
  • November 6, 2007- Allocation of Lohara West and Lohara Extension (E) Coal mining blocks for Tiroda Power Project
  • January 15, 2008 -Execution of Shareholder Agreement with Millennium Developers Private Limited for investment in Tiroda Project
  • February 1, 2008 -Agreement to Lease for 204.28 ha signed with Maharashtra Industrial Development Corporation for Tiroda Project
  • March 4, 2008 -Sanction of underwriting of term loan of Rs. 16,300 million for Tiroda Power Project
  • March 24, 2008 -PPA with AEL for 221 MW
  • March 24, 2008 -Coal supply agreement with AEL for Mundra Phase III Power Project
  • March 27, 2008 -Execution of loan agreement (financial closure) for Mundra Phase III Power Project
  • March 27, 2008-Execution of subordinate loan agreement for Mundra Phase III Power Project
  • March 28, 2008-Execution of foreign currency loan agreement for Mundra Phase III Power Project
  • April 15, 2008 -Coal supply agreement with AEL for Mundra Phase IV Power Project, which was amended on April 13, 2009
  • August 7, 2008- PPA with UHBVNL for 712 MW
  • August 7, 2008- PPA with DHBVNL for 712 MW
  • September 8, 2008 -PPA with MSEDCL for 1,320 MW
  • November 24, 2008- Investment Agreement with Ventura Power
  • January 8, 2009 -Co-developer agreement with MPSEZL
  • January 30, 2009 -Execution of loan agreement (financial closure) for Tiroda Power Project – Phase I
  • March 25, 2009 -Boiler light-up of unit I of Mundra Power Project – Phase I
  • March 27, 2009 -Share subscription agreement with Somerset Fund
  • Nov 24, 2010 - Adani Power successfully synchronized its fourth unit of 330 megawatt (MW) at Mundra in Kutch of Gujarat.
  • Jun 07, 2011 - Adani Enterprise’s subsidiary -- Adani Power -- successfully synchronized the second supercritical unit of 660-MW at its state of art  power plant in Mundra, in Kutch district of Gujarat, taking the total generation capacity to 2,640 MW.
Puchho Befikar
SEBI Registered: Investment Adviser - INA000013323
Research Analyst - INH000000719

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