Tag Energy Sector

Adani Power Ltd & Adani Energy Solutions Q3 FY25 Results
Adani Power Ltd & Adani Energy Solutions Q3 FY25 Results: Robust Profit and Strategic Expansion in India’s Energy Sector

Adani Power Ltd: Overview 

Adani Power Ltd. (APL), a subsidiary of the Adani Group, is one of India’s largest private-sector power producers, focusing on thermal power generation. Established in 1996, the company has grown rapidly, playing a crucial role in meeting India’s increasing electricity demand. It operates a diversified portfolio of coal-based power plants across multiple states, contributing significantly to the country’s energy security. With a total installed capacity of over 15 GW, Adani Power is a key player in India’s electricity sector, supplying power to both state utilities and industrial consumers through long-term Power Purchase Agreements (PPAs) and merchant power sales. The company has also expanded its global footprint, acquiring power assets in countries like Bangladesh and Sri Lanka. India’s power sector is one of the largest in the world, driven by rising electricity consumption, rapid urbanization, and industrialization. The government’s focus on ensuring 24/7 power supply and its ambitious renewable energy targets are shaping the future of the industry. While renewable energy is gaining momentum, thermal power (primarily coal-based) still accounts for over 55% of India’s total electricity generation. Given the country’s vast coal reserves and the need for stable base-load power, coal-fired power plants remain a critical part of the energy mix. However, the sector faces challenges such as coal supply constraints, regulatory changes, and increasing pressure to reduce carbon emissions. 

Latest Stock News 

Adani Power’s revenue growth remained aligned with volume expansion but was moderated by lower average tariff realization, driven by a decline in import fuel prices and lower merchant tariffs. India is expected to add 80 GW of additional coal-based power capacity by FY 2031-32 to meet the accelerating demand, with 49 GW of this capacity still untapped, presenting significant growth opportunities. APL achieved more than 100% fly ash utilization for Q3 FY25 across almost its entire fleet. Adani Power has identified a 12.52 GW development pipeline to capitalize on this potential. NCLT (Ahmedabad) sanctioned the Scheme of Amalgamation of SMRPL, a wholly owned subsidiary of AEL, with MEL, a subsidiary of APL, vide its order dated 7 th November 2024. Operationally, the Dahanu, Godda, Mahan, and Udupi plants achieved 100% availability in October 2024, while Kawai and Udupi reached the same milestone in December 2024. The company has also made significant progress in reducing its senior term debt through a combination of prepayments and scheduled repayments, despite ongoing acquisitions and organic expansion. Additionally, Adani Power signed a long-term Power Purchase Agreement (PPA) with Maharashtra State Electricity Distribution Company Limited (MSEDCL) for the procurement of 1,496 MW (net) of thermal power during the quarter. 

Q3 FY25 Earnings 

  • Revenue of ₹13671 crore in Q3 FY25 up by 5.23% YoY from ₹12991 crore in Q3 FY24.  
  • EBITDA of ₹5023 crore in this quarter at a margin of 37% compared to 36% in Q3 FY24. 
  • Profit of ₹2940 crore in this quarter compared to a ₹2738 crore profit in Q3 FY24. 

Adani Energy Solutions Ltd: Overview 

Adani Energy Solutions Ltd is a prominent player in the energy sector, focusing on the generation, distribution, and transmission of electricity. A part of the Adani Group, the company operates across multiple energy segments, including renewable and conventional energy generation, power transmission, and distribution services. With a strong emphasis on sustainability, Adani Energy has invested significantly in renewable energy projects, particularly in solar and wind power, aiming to contribute to India’s growing clean energy needs. The company’s renewable energy capacity is steadily expanding, making it one of the largest green energy companies in the country. Additionally, Adani Energy is involved in power distribution, particularly in the states of Gujarat, Maharashtra, and Chhattisgarh, where it serves both residential and industrial consumers. The industry outlook for the energy sector, especially in India, remains positive, driven by increasing energy demand, a shift towards renewable energy, and government support through various policies and initiatives. India’s commitment to achieving net-zero carbon emissions by 2070 has accelerated the growth of renewable energy investments, with significant capacity additions expected in the coming years. The country is on track to increase its renewable energy capacity to 500 GW by 2030, with solar and wind power playing pivotal roles in achieving this target. 

Latest Stock News 

EBITDA for the quarter grew by 6%, reaching Rs 1,831 crore, driven by strong revenue growth, EPC income from transmission, treasury income, and stable regulated EBITDA from AEML. The company secured two new transmission projects – Khavda Phase IV Part-D and Rajasthan Phase III Part I (Bhadla – Fatehpur HVDC), adding 3,044 ckm to its under-construction network. With five new projects won this year, the under-construction transmission pipeline has surged to approximately Rs 54,761 crore in Q3FY25, up from Rs 17,000 crore. AESL significantly increases its capex ramp-up driven by unparalleled project and operating excellence coupled with robust capital management program. The capital expenditure (capex) for 9MFY25 rose to Rs 7,475 crore, compared to Rs 3,784 crore in the same period last year. The company is progressing well with a robust under-construction project pipeline, which includes 13 projects worth Rs 54,761 crore. The under implementation pipeline stands at 22.8 million smart meters, comprising nine projects with a revenue potential of over Rs 27,195 crore. The deployment of smart meters is also on track, with an average run-rate of 15,000 meters per day, expected to increase to 20,000 meters per day by the next quarter. In Q3FY25, the capex amounted to Rs 3,074 crore, which is three times higher than the Rs 1,162 crore spent in Q3FY24. 

Q3 FY25 Earnings 

  • Revenue of ₹5830 crore in Q3 FY25 down by 27.8% YoY from ₹4563 crore in Q3 FY24.  
  • EBITDA of ₹1661 crore in this quarter at a margin of 28% compared to 32% in Q3 FY24. 
  • Profit of ₹625 crore in this quarter compared to a ₹348 crore profit in Q3 FY24. 
Petronet LNG Limited Latest update
Petronet LNG Limited: Regulatory Challenges and Clean Energy Transition

Petronet LNG Limited: Overview 

In 1998, Petronet LNG Ltd. was established to oversee the planning, building, and operation of LNG import and regasification terminals, hence playing a crucial role in India’s energy sector. GAIL, Indian Oil Corporation (IOCL), Bharat Petroleum (BPCL), and ONGC formed the joint venture, each with an equal 12.5% share. It runs two main terminals, one in Dahej, Gujarat, with a capacity of 17.5 MMTPA and another in Kochi, Kerala, with a capacity of 5 MMTPA, for a total of 22.5 MMTPA. The majority of its revenue, around 95%-96%, comes from LNG sales, with the remaining 3%-4% from regasification services. GAIL, IOCL, and BPCL are key customers, accounting for about 95% of total revenue. Petronet is building a new LNG terminal at Odisha, with an initial capacity of 4 MMTPA and an estimated investment of ₹2,300 crore, as part of its infrastructure expansion to further solidify its position. The corporation is also increasing the storage and regasification capacities of its existing terminals. Furthermore, Petronet is expanding into the Green Hydrogen value chain, demonstrating its commitment to innovation, sustainability, and alignment with global clean energy trends. 

Shareholding Pattern as on September 2024 

Key Stats 

Market Cap ₹49190 Crore 
Revenue ₹54977 Crore 
Profit ₹3917 Crore 
ROCE 26.41% 
P/E 12.56 

Peer Comparison 

Amt in ₹ Cr MCap Sales PAT ROCE Asset Turn. EV/EBITDA D/E P/E 
Petronet LNG 49190 54977 3917 26.41% 2.22 6.67 0.15 12.56 
GAIL 125577 136080 11534 14.66% 1.15 7.25 0.23 10.89 
Adani Total Gas 80845 4687 702 21.2% 0.73 66.3 0.37 115.3 
Gujarat Gas 34970 16295 1225 20.51% 1.39 15.36 0.02 28.55 
Mahanagar Gas 12802 6437 1149 36.6 0.94 6.85 0.03 11.14 

Financial Trends 

Amount in ₹ Cr 2020 2021 2022 2023 2024 
Revenue 35452 26023 43169 59899 52729 
Expenses 31462 21323 37918 55045 47520 
EBITDA 3990 4700 5250 4854 5209 
OPM 11% 18% 12% 8% 10% 
Other Income 306 377 395 523 605 
Net Profit 2703 2939 3438 3326 3652 
NPM 7.6% 11.3% 8.0% 5.6% 6.9% 
EPS 18.02 19.59 22.92 22.17 24.35 

Stock Price Analysis 

The stock has not given any return in phase of 2017 to 2023, it was in consolidation and broke it and now it is trading at around its high level of ₹340 per share. The volume of shares traded has lowered these days compared to years in history. The stock might fall a little on basis of technical analysis for couple of months. 

Latest Stock News (2 January 2025) 

Petronet LNG Ltd. clarified that LNG terminal regulation does not fall under the PNGRB’s purview without amendments to the 2006 Act. The company highlighted its competitive regas charges, which constitute only 5-6% of delivered gas prices.

However, PNGRB’s recent paper criticized rising regas charges despite capacity expansion at the Dahej terminal, suggesting the need for regulatory oversight to ensure fair pricing. Foreign brokerage Citi flagged regulatory risks, issuing a “Sell” rating with a ₹310 target. Petronet shares dropped 5.49% to ₹328.50, signaling a negative start to 2025 after a 45% gain in 2024.

Adani Total Gas
Adani Total Gas : Assessing Revenue Growth and Valuation Metrics

Company Overview 

Adani Total Gas Limited (ATGL), a joint venture between the Adani Group and TotalEnergies both owning 37.4 percent equity shares in the company, is one of the big players in CGD in India. The company’s primary operations include transportation gas supply and supply of natural gas for domestic, commercial and industrial purposes. ATGL commenced operations in 2004 and has grown to serve 34 districts while having equity stakes in a further 19 districts through a joint venture with the Indian Oil Corporation known as Indian Oil Adani Gas Pvt Ltd (IOAGPL). The cumulative distribution of Compressed Natural Gas (CNG) and Piped Natural Gas (PNG) with the active distribution of 577 CNG stations within the network by October 2024 remain the core businesses within its operations contributing positively to its operational finance. Consistent with its promise to sustainability, the company has diversified its operations into innovative energy solutions through its subsidiary Adani TotalEnergies E-Mobility Limited, focused on biogas, LNG, green hydrogen and electric vehicle infrastructure. Notwithstanding recent controversies sparked off by the allegations involving its parent company concerning corporate governance, ATGL rests the arguments on premises that the concerns surrounding their investment will lead to growth and therefore innovation which it has funding of $375 million sourced internationally to expand its distribution network across 13 states that is in line with India’s clean energy vision. 

Returns Summary 

YTD 1 Month 6 Month 1 Year 2 Year 3 Year 5 Year 
-22.46% -5.54% -13.68% -22.46% -79.26% -55.29% 371.14% 

3Years Return: SBI Ltd. v/s Nifty 50 

Shareholding Pattern 

Key Metrics 

Metrics – 
Mkt Cap (INR Cr):              83,230 Cr. 
52-week H/L:                      1198/546 
PE Ratio:                             120.81 
Dividend yield:                   0.03% 
ROCE:                                21.26% 
P/B:                                    21.5 
NSE Code:                          ATGL 

Financial Trends 

Year Sales (₹ Cr) Operating Profit (₹ Cr) OPM (%) Net Profit (₹ Cr) EPS (₹) Reserves (₹ Cr) Borrowings (₹ Cr) Fixed Assets (₹ Cr) Debt/Equity 
Mar-18 1,374 366 27% 162 6.31 759 1,345 897 1.77 
Mar-19 1,719 455 26% 229 2.08 992 394 980 0.4 
Mar-20 1,875 595 32% 436 3.97 1,361 428 1,198 0.31 
Mar-21 1,696 704 42% 463 4.21 1,824 529 1,379 0.29 
Mar-22 3,038 773 25% 509 4.63 2,306 1,035 1,733 0.45 
Mar-23 4,378 870 20% 546 4.97 2,831 1,422 2,335 0.5 
Mar-24 4,475 1,104 25% 668 6.07 3,470 1,557 3,174 0.45 

Peer Comparison 

Company Price (₹) Market Cap (₹ Cr) P/B P/E EPS (₹) ROE (%) ROCE (%) P/S EV/EBITDA 
Adani Total Gas 761.05 83,701.05 21.5 120.81 6.3 20.09 21.26 18.72 69.58 
Gujarat Gas 498.7 34,330.02 4.32 27.1 18.4 15.56 21.65 2.19 15 
Indraprastha Gas 415.65 29,095.53 3.1 18.1 22.96 22.36 29.86 2.08 10.55 
Gujarat State Petronet 361.9 20,418.81 1.93 18.16 19.93 13.15 16.86 10.05 11.88 
Mahanagar Gas 1,284.40 12,687.02 2.29 11.04 116.37 27.79 37.6 2.03 6.71 
Confidence Futuristic 89.7 224.43 1.6 83.78 1.07 1.86 2.63 44.36 58.09 

Latest News

Adani Total Gas has reported a 7.2% revenue growth over the past year and an impressive 111% growth over three years. Despite industry-wide challenges, including a projected 5.1% revenue decline, the company has maintained resilience, justifying its elevated price-to-sales (P/S) ratio.

Investors remain optimistic about its ability to outperform peers, but future growth hinges on overcoming challenges like declining natural gas allocations. With revenue growth exceeding industry trends, Adani Total Gas continues to attract attention, though its ability to sustain this momentum will be crucial.

Stock Analysis 

On December 31 2024 Adani Total Gas Ltd. Share price close in a market fall-down by 3.28% and made an intraday low at 726.6. This fall came on the heels of four consecutive days of gain and was in stark contrast to 2.46 percent fall (over the past month) with the Sensex. One of the major reasons for the drop is the decrease in APM-priced domestic gas allocation. In this regard GAIL India Limited vide letter dated November 15 2024, communicated to ATGL, a reduction in gas allocation by 13% effective from November 16 2024. Its relatively decrease affect all the City Gas Distribution CGD sector. It also expected to speak negatively of the firm about profits. Noting revenue, the last push could be rationalized on a standalone basis by ATGL is basically growing revenue in some form of consistent manner. This may lead investors speculate that revenues will come through hard and glaze in the coming period and allow sales annual growth. According to the consensus of analysts, the stock’s target price is ₹1,085.00, which means that it can potentially gain by around 59.72% from the last closing price of ₹679.30.   The recent cuts on gas allocation and potential cuts on profitability should sway investors and affect stock performance in the near term, however. How quickly is still dependent on how ATGL manages these issues and tailors its approach to mitigate the effects of declining natural gas supplies. It is up to investors to closely watch and see what operational improvements ATGL makes on top of market developments to determine when a turnaround in the company’ stock performance will occur.  

Investors are advised to keep their eyes on the companies’ financials and strategic decisions which will provide further direction as to take the appropriate action in short term. However, the future from long term perspective looks attractive.