Pursuant to stake sale in Adani Transmission (India) by the company in the previous year, the merger of Solar Power Undertaking of AEL with the company and acquisition of 100% stake of Udupi Power Corporation (UPCL) by the company during Q2FY16, the figures for the current quarter are not comparable with the figures of corresponding quarter of previous year, to that extent. Results of UPCL were consolidated from April 21, 2015.

• Sale excluding other operating income was up by 57% to Rs 7335.37 crore. Upside in revenue for the quarter was largely due to higher volume of electricity sold. While the electricity sold was up by 42% to 17.01 billion units for the quarter the average realization was down by 18% to Rs 3.19 per unit. Meanwhile the aggregate compensatory tariff as per APTEL/MERC/RERC order also stood higher by 230% to Rs 1376.68 crore. If the compensatory tariff is excluded from topline, the electricity sales will be higher by 40% to Rs 5959.69 crore.

• Of the Rs 1375.68 crore an amount of Rs 118.7 crore (down 37%)pertain to 1000MW PPA with GUVNL and 1424 MW PPA with Haryana Discom as the CERC order has been confirmed by APTEL in the appeal of GUVNL/Haryana Discom. In another PPA with GUVNL the compensatory tariff is Rs 244.83 crore as against nil in the corresponding previous period. Similarly compensatory tariff of Rs 320.97 crore (including additional compensatory tariff of Rs 174.76 crore) in favour of Adani Power Maharashtra by MERC was higher by 15%. Balance amount of Rs 797.73 crore (up 1702%) is compensatory tariff in favour of Adani Power Rajasthan by RERC.

• Expansion in operating profit margin to the tune of 40 bps to 32.4% is largely due to lower cost in all cost heads. While fuel cost as proportion to sales was lower by 920 bps to 50.3%, the staff cost was down by 170 bps to 0.4%, the power purchase cost was down by 270 bps to 1% and other expenses were lower by 380 bps to 5.3%. The cost with improved operational efficiency across all plants and incremental contribution from UPCL spurred the profits. Thus spurred by higher sales and marginally higher margin, the operating profit jumped by 164% to Rs 3158.70 crore.

• Other income was down by 31% to Rs 111.97 crore. The interest cost (net of MTM gain/loss on derivatives) was lower by 17% to Rs 1547.19 crore. Higher interest cost for the quarter is mainly due to fair valuation of derivatives taken for interest rate swaps. Depreciation was a charge of Rs 584.19 crore compared to a credit of Rs 22.18 crore in the corresponding previous period. Depreciation charged for the quarter is not comparable with corresponding previous quarter as the company has given effect to Schedule II of the companies Act 2013. Thus PBT before EO was higher at Rs 1139.29 crore compared to profit of mere Rs 57.49 crore in the corresponding previous period.

• EO income for the quarter was nil compared to an income of Rs 657.56 crore in the corresponding previous period was nil. Thus the PBT after EO level was up by just 59% to Rs 1139.29 crore.

• Taxation for the quarter was a write back of Rs 34.10 crore compared to nil in the corresponding previous period. Thus the PAT was up by 64% to Rs 1173.39 crore.

Yearly performance

Consolidated revenue was up by 29% to Rs 25231.57 crore. But with 400 bps expansion in operating profit margin, the growth at operating profit was 47% to Rs 8552.93 crore. The other income was down by 18% to Rs 201.78 crore. After accounting for higher interest (up 11% to Rs 5964.16 crore) and depreciation (up 13% to Rs 2336.17 crore), the PBT was a profit of Rs 454.38 crore compared to a loss of Rs 1346.80 crore in the corresponding previous period. EO item for the period was nil compared to an income of Rs 531.17 crore in the corresponding previous period. Thus the loss at PBT (after EO) level it was a profit of Rs 454.38 crore compared to a loss of Rs 815.63 crore in the corresponding previous period. Taxation for the period was a write back of Rs 34.10 crore compared to nil in the corresponding previous period. Thus the profit at PAT was Rs 488.48 crore compared to a loss of RS 815.63 crore in the corresponding previous period.

Management Comment

Gautam Adani, Chairman of Adani Power, commenting on the financial performance has said, "With power sector continuing to be an essence for growth of the Indian economy and announcement of revised tariff policy by the Government, Adani Power anticipates further growth opportunities in the sector. Adani Power remains committed to expanding towards the goal of achieving a thermal power generation capacity of 20000 MW by 2020 to bridge the power deficit in the country. Adani Power continues to maintain its leadership position as India's largest private sector power producer."

Vineet Jaain, CEO of the company said, "During the year, the company has demonstrated robust operational and financial performance. The results for the year from all our operating plants reflect our achievements of operational excellence and higher volumes from world class thermal power plants. Mundra plant's generation of 33.1 billion units during the year, is the highest by any thermal power plant in the country which is the testimony of our achievement."

Other developments

APTEL, vide its order dated April 7, 2016 decided that the promulgation of Indonesian regulations as also the non-availability/ short supply of domestic coal constitute a Force Majeure event under the PPAs, and has directed the CERC to assess the extent of impact of such Force Majeure events on the project, and give such relief as may be available under the respective PPAs. This is expected that implementation of the APTEL order will improve the cash flow and gearing of the company.