Adani Power

The company ended the second quarter with a consolidated net loss at Rs.1072 crore. . The only consolation is that it is lower than the loss of Rs.1198 crore in Q1 but much higher than Rs.261 crore loss in Q2FY13. In terms of revenue earned, the company has done well, with net revenue coming in at Rs.3042 crore, up 20% (QoQ) and up 102% (YoY). What really did in the company, like in every quarter are forex losses, high cost of imported coal/fuel, depreciation and high interest outgo. In fact interest outgo this quarter stood at a gargantuan Rs.860 crore, compared to Rs.675 crore in Q1 and Rs.350 crore in previous Q2. Interest outgo in current H1 stood at Rs.1535 crore compared to Rs.1646 crore entire of FY13.

In Q2Fy14 the company sold 9.1 billion units v/s 4.1 billion units in previous Q2. For now there is certainly no improvement in the performance of the company and as long as the Damocles sword of interest burden due to the high debt, depreciating rupee continues to hang over the company, numbers are not going to improve. The company is awaiting a power tariff hike but with elections round the corner, this is not expected to happen any time so soon. Well, the only trigger for the stock in the near term, if at all it happens, would be the price hike. Best to stay away from this stock.