Adani Power Q2 FY27 Earnings Call: Targets 45 GW Capacity by 2032, Record PAT Up 141% YoY (ADANIPOWER)

Adani Power Ltd held its Q2 FY27 earnings call on October 23, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Record PAT, But One-Offs Flattered the Headline

• PAT of Rs.7,019 Cr, +141% YoY (vs Rs.2,906 Cr in Q2 FY 2025-2026); H1 FY 2026-2027 PAT at Rs.11,886 Cr (+91% YoY). The quarter included a net tax credit of Rs.231 Cr from reversal of provisions following amalgamation of subsidiaries with Adani Power.
• Continuing revenue grew 28.5% YoY to Rs.17,528 Cr in Q2 FY 2026-2027; reported revenue of Rs.19,951 Cr includes one-time prior-period revenue of Rs.2,422 Cr (vs Rs.669 Cr in Q2 FY 2025-2026), primarily from revision of initial energy charges for the Gujarat PPA.
• Continuing EBITDA of Rs.6,321 Cr (vs Rs.5,333 Cr in Q2 FY 2025-2026, +18%+); reported EBITDA grew 45-46% to Rs.8,743 Cr on prior-period items. H1 FY 2026-2027 continuing EBITDA grew 20.1% to Rs.13,304 Cr.
• Sales volume rose 11.5% YoY to 26.4 bn units on the same operating capacity; PLF improved to 70.1% from 62.8% in Q2 FY 2025-2026. H1 FY 2026-2027 volume grew 14.3% to 50.1 bn units with PLF at 74.1%.
• Fuel cost rose 40% YoY to Rs.10,229 Cr, driven by higher volumes and an approximate 50% increase in landed cost of imported coal — a headwind that outpaced revenue growth.
• Finance costs lower at Rs.760 Cr vs Rs.842 Cr in Q2 FY 2025-2026; H1 FY 2026-2027 finance costs at Rs.1,662 Cr.
• Analyst Vishal Periwal (PL Capital) observed margins were slightly lower in Q2 FY 2026-2027; CFO Dilip Shah did not provide an EBITDA breakup (merchant, capacity charge, energy charge) on the call, directing analysts to IR for one-to-one details.

Discom Offtake Up Sharply; Merchant Volumes Deliberately Shrunk

• Long/medium-term PPA sales expanded 29.7% to 23.4 bn units in Q2 FY 2026-2027, reflecting increasing offtake by discoms and larger capacity under PPAs; PPA realization improved 12.7% on a continuing basis.
• Merchant/short-term volumes fell 43% YoY as open capacity was strategically tied up under medium-term contracts, while short-term merchant tariffs surged 33% per unit.
• Long-term PPAs now secured for 62% of the upcoming 24 GW thermal pipeline (as of Q2 FY 2026-2027), including a letter of award for a 25-year PPA of 1,320 MW from Uttarakhand Power Corporation Limited, to be supplied from the upcoming Korba Phase 2 project.
• Uttarakhand PPA carries a fixed charge of Rs.4.30 (base), signed during Q2 FY 2026-2027.
• PPA bid location rules vary by state — CEO S.B. Khyalia clarified: UP and Gujarat bids allow the plant to be located anywhere in India; the Rajasthan bid is state-specific; the West Bengal bid is location-specific, tied to the state's existing power plant.
• No AESL tie-ups — the 18 GW operational portfolio and the under-construction portfolio have no AESL tie-ups so far; offtake is entirely with third parties (CEO S.B. Khyalia and IR head Nishit Dave).

Imported Coal Spike, Tariff Lag, and Two Accounting Adjustments

• Fuel cost rose ~20% QoQ in Q2 FY 2026-2027 (analyst's calculation); CEO attributed the increase primarily to imported coal-based projects, where most capacity is on a pass-through basis, and Gujarat's index-linked tariffs are effectively pass-through as well.
• Tariff reflection lag — the Q2 FY 2026-2027 imported coal price increase will not be reflected in tariffs in Q3 and Q4 FY 2026-2027 due to the indexing mechanism; management expects reflection only after more than 6 months, probably in Q1 FY 2027-2028. Gujarat per-unit realization was not below actual fuel cost, though margins were slightly lower than they would otherwise have been.
• Bangladesh PPA has no lag — tariffs are determined based on international prices, so international price increases are immediately reflected in billing.
• Coal India has not increased rates; effective domestic coal cost rose slightly in Q2 FY 2026-2027 due to poor coal quality received during the monsoon — a recurring annual Q2 phenomenon not directly reflected in tariffs.
• Haryana Discom claim revenue de-recognized — Adani Power reversed ~Rs.19.7-20 billion of revenue in Q2 FY 2026-2027 on alternate coal compensation claims (issues dating from 2021 to 2023 onwards), a conservative treatment adopted on the auditors' advice despite the money (50% of the total claim) having been received; management confirmed no additional provision is required on this item.
• Gujarat DISCOM one-off fully recognized — the Rs.2,422 Cr arose from a retrospective revision in the base rate for indexation; dues were received in three installments over Q1-Q2 FY 2026-2027, and the CFO stated no past-period recovery remains as of now.
• On refund interest for the Haryana Discom matter, management does not foresee any net outgo but declined to rule out a small interest provision, stating no forecast can be made at this stage.

45 GW by 2032; Hydro Entry via GVK and Bhutan

• Total capacity target of 45 GW by 2032 — 42 GW of new build on top of the current 18 GW, plus 3 GW expected through inorganic acquisitions (per the presentation note, including slide 12), correcting the analyst's impression of 46 GW.
• Korba Phase 2 execution — the first 660 MW unit achieved grid synchronization and is expected to start operating in Q3 FY 2026-2027; CEO S.B. Khyalia added the second unit is expected to start by around December 2026 (Q3 FY 2026-2027).
• Mahan Phase 2 (1,600 MW) at an advanced stage with commercial operations targeted for early FY 2027-2028; Raipur Phase 2, Raigad Phase 2, Mirzapur, and Anupur projects are under execution. Raipur Stage 3 (1,600 MW ultra-supercritical) will expand Raipur to 4,570 MW to supply a second long-term PPA to Maharashtra DISCOM.
• Hydro entry via CIRP — Adani Power declared itself successful resolution applicant for GVK Energy Limited, marking entry into hydro generation through the operational 330 MW Alaknanda plant in Uttarakhand.
• Bhutan expansion — signed a shareholders agreement with Druk Green Power for a 770 MW hydropower project through a 49:51 joint venture, the second joint development in Bhutan after the 570 MW hydro project; per group strategy, Adani Power takes up hydro only at the international level (Adani Green handles hydro within India), with an MoU for 5,000 MW of hydro projects in Bhutan and a current target to reach 5,000 MW (period unspecified).
• Korba interim plan — since the Uttarakhand PPA supply commences after 4 years (~FY 2030-2031), management will look to sell the assigned Korba capacity under medium-term or merchant arrangements during the interim 4-year period; a medium-term PPA would bring coal linkage, while merchant sales would require sourcing coal from auctions.

Gross Debt Up, Net Debt Flat; Peak Debt Seen at Rs.1 Lakh Cr

• Gross debt increased to Rs.61,000 Cr as of 30 September 2026 (Rs.61,860 Cr per the detailed disclosure) from Rs.53,556 Cr as of 31 March 2026, but net debt remained flat at ~Rs.45,000 Cr (Rs.45,846 Cr) over H1 FY 2026-2027, which CFO Dilip Shah attributed to tight liquidity management and deployment controls.
• ~Rs.6,000 Cr received from GVNL during the period, adding to internal accruals; management cited this and flat net debt as the reason financing costs stayed almost flat with a slight QoQ reduction.
• Interest cost declined from Rs.900 Cr in Q1 FY 2026-2027 to ~Rs.760 Cr in Q2 FY 2026-2027 (figures cited by the Jefferies analyst and acknowledged by the CFO).
• Credit rating upgraded from AA to AA+ during Q2 FY 2026-2027 by CARE Ratings and India Ratings, acknowledging financial discipline, robust liquidity buffers, and cash flow predictability.
• Peak debt guided at around Rs.1 lakh crore by FY 2030-31 — CFO Dilip Shah confirmed this is nearly 2x the current debt level.
• Management declined to provide a timeline for EBITDA reaching Rs.1 lakh crore (period unspecified), saying it would be inappropriate to make such a statement at this stage; the CEO suggested it could be computed from signed PPAs and capacity additions. On a further upgrade, CEO S.B. Khyalia said management is taking the argument up with the rating agencies that all borrowing can be serviced from existing operations' EBITDA, and hopes the rating will improve — no upgrade was committed.

Strong FY28 Market Expected; No Granular H2 Guide

• India's power demand rose 11.5% YoY to 502 bn units in Q2 FY 2026-2027, with peak demand reaching 270 GW; coal and lignite supplied 73% of incremental generation needed amid lower hydropower output from a weak monsoon, and average summer PLF increased to 68% from 62% a year earlier.
• Management declined granular H2 FY 2026-2027 guidance, reiterating that full-year FY 2026-2027 guidance already given versus initial expectations at the start of the year; it observed the power market performed better than initial expectations in FY 2026-2027, with profitability improving in line.
• Management expects the power market to remain quite strong in FY 2027-2028, citing the pattern of demand and the way demand has been growing; capacity expansion plans are very much in line with expected demand growth (period unspecified).
• Government of India's thermal outlook — on reports that India's thermal capacity addition is being extended beyond the government's 97 GW target for 2035, the CEO called it welcome news, saying "the Government of India has recognized this"; the CA chairman's statement was made with reference to Q2 FY 2026-2027 power shortages. Management separately stated India needs more than 100 GW of new thermal capacity by 2032.
• Data centers seen as incremental demand — management noted data center load has not yet started and called data centers "power guzzlers" requiring 24x7 base-load supply that only thermal projects can provide; Adani Power is not signing PSAs directly with data centers, with tie-ups routed via the AESL trading platform or through discoms.
• Tender pipeline — UP bids submitted (opening expected October or early November 2026, Q3 FY 2026-2027); West Bengal (1,600 MW) and Rajasthan bids to be submitted in the first week of November 2026 (Q3 FY 2026-2027); Gujarat has completed bidder consultation but has yet to approach the regulatory commission, slightly behind other states.
• Nuclear — draft rules and regulations have been circulated and the stakeholder comment process is complete; management expects the rules to be notified soon, after which it will take capacity expansion forward. Analyst-cited nuclear plans till 2035 and 10+ year build timelines were not confirmed; no tariff or land details provided.