Adani Power

The stock was in the news on Tuesday, in the green, after it announced that its 4620 mw project at Mundra has set a record by attaining the highest generation of 4,644 MW, making it the only power station of such a gigantic size to reach a significant milestone in electricity production. Adani Power has a thermal power generating capacity of 7,920 mw, consisting of 4620 mw at Mundra, 1980 mw at Tiroda and 1320 at Kawai. The Mundra plant, which is one of the world's largest private coal based power station at a single location, has five units of 660 mw and four units of 330 mw each.

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 was awaiting a power tariff hike but with elections round the corner, this did not happen; in fact it announced a rate cut!