Ladies and gentlemen, good day and welcome to Adani Power Q2 and FY 2027 earnings conference call hosted by Antique Stock Broking Limited. This conference call may contain forward-looking statements about the company, which are based on beliefs, opinion, and expectation of the company as on date of this call. These statements are not the guarantee of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant line will be in the listen- only mode, and there will be an opportunity for you to ask questions after the presentation conclude. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ishan Verma from Antique Stock Broking Limited. Thank you, and over to you, Ishan.
Thank you, Danish. Good morning, everyone. On behalf of Antique Stock Broking, I welcome you all to the-
Ishan, I am sorry to interrupt you, but your voice is breaking.
Is it better now?
No.
Hello, is it better?
No, Ishan. It's not clear. Ladies and gentlemen, we will stay connected while Ishan Verma will reconnect. Thank you. Ladies and gentlemen, we are now back. Over to you, Ishan.
Thank you, Danish. Good morning, everyone. On behalf of Antique Stock Broking, I welcome you all to the Q2 FY 2027 earnings conference call of Adani Power Limited. We have with us today from the management, Mr. S.B. Khyalia, CEO; Mr. Dilip Jha, CFO; and Mr. Nishit Dave, Head of Investor Relations. We will begin with the brief opening remarks followed by a Q&A session. Thank you, and over to you, sir.
Good morning, friends. Welcome to our quarter two earnings call. Thank you for joining us today. Our quarterly results and analyst presentation are available on the stock exchanges and our website. I hope you have gone through them already. Joining me today on this call are our CFO, Mr. Dilip Jha, and our Investor Relations Head, Mr. Nishit Dave. The recently concluded quarter has been another blockbuster quarter for us. Power demand has been strong, and power selling rates are high. We have seen healthy volume growth on the same operating capacity year-on-year. As a result, we have seen strong growth in our revenues and EBITDA and ended the quarter with a solid profit after tax of INR 7,000 crore. We have also moved closer to commissioning the first unit of our ongoing capacity expansion projects. Now, coming to the power market first.
India needs abundant and reliable baseload power supply using domestic coal. This is especially important in times of geopolitical uncertainty, changing weather patterns, and rapid industrialization. Domestic coal-based power remains vital to India's energy security and economic growth. India's power demand rose 11.5% year-on-year to 502 billion units in quarter two. With lower hydropower output because of weak monsoon, coal and lignite stepped up supply 73% of incremental generation needed to meet the demand. The average summer PLF increased to 68% from 62% a year earlier. Now, coming to Adani Power's performance in this backdrop. We achieved power sales growth of 11.5% and supplied 26.4 billion units in this quarter, and our PLF improved to 70%. This was supported by a high level of plant availability across our portfolio.
This strong operating performance delivered record quarterly results. Total continuing revenue rose almost 30% to more than INR 17,000 crore. Continuing EBITDA rose by more than 18% to INR 6,300 crore. This reflects the strength of our core portfolio despite higher fuel prices. Reported EBITDA rose by 46% to more than INR 8,700 crore. Consolidated profit after tax rose 142% to more than INR 7,000 crore. This was supported by strong operating profit and one-time prior period revenue. For H1, total continuing revenue was nearly INR 35,500 crore. Continuing EBITDA was INR 13,300 crore, and profit after tax was nearly INR 12,000 crore. Quarter two was also an important quarter for our corporate structure, financial profile and capacity expansion. Adani Power's credit rating was upgraded from AA to AA+.
The upgrade reflects our operating track record, strong cash flows, market leadership, revenue visibility, and balance sheet flexibility. We received a letter of award for a 25-year PPA of 1320 MW from Uttarakhand Power Corporation Limited during this quarter. It will be supplied from the upcoming Korba 2 Power Project. We have now secured long-term PPAs for 62% of our upcoming 24 GW thermal pipeline. We were declared the successful resolution applicant for GVK Energy Limited under the CIRP process. This marks our entry into hydro generation through the operational 330 MW Alaknanda plant in Uttarakhand. We are expanding into dispatchable clean energy by expanding our project portfolio in Bhutan. We signed a shareholders agreement with Druk Green Power, our project partner, for 770 MW hydropower project. The project will be developed through a 49/51 joint venture.
It is our second joint development in Bhutan after the 570 MW hydro project. We are progressing quickly and steadily on our 24 GW thermal capacity pipeline. At Korba Phase 2, the first 660 unit has been achieved grid synchronization. Commercial commissioning is expected shortly. The second unit is planned for quarter four of 2027. The 1,600 MW Mahan Phase 2 project is also at an advanced stage. Commercial operations are targeted for early financial year 2028. Similarly, Raipur Phase 2, Raigarh Phase 2, Mirzapur, and Anuppur projects are also under execution. We are also adding the third phase of expansion with a 1,600 MW ultra-supercritical power plant at Raipur. This will expand the size to 4,570 MW and supply the second long-term PPA to Maharashtra DISCOM. In conclusion, India needs more than 100 GW of new thermal capacity by 2032.
Adani Power has the execution capability through logistics and balance sheet to support this growth. We remain committed to reliable, cost-competitive, round-the-clock power and sustainable stakeholder value. Thank you. I will now hand over to our CFO, Mr. Dilip, for the financial and operational details. Over to you, Dilip.
Thank you, sir, and good morning, everyone. I will walk you through our financial and operating performance for quarter two FY 2027. I will provide you an update on our balance sheet, debt metrics, and liquidity position. As Khyalia highlighted, quarter two FY 2027 was marked by intense demand growth, which was driven by economic momentum and a weak monsoon. Peak demand reached 270 GW and power exchanges saw substantial tariff increase. Plant load factor increased to 70.1% in quarter two FY 2027 from 62.8% in quarter two FY 2026. For H1 FY 2027, PLF reached 74.1% against 64.8% last year. Consolidated sales volume expanded by 11.5% to 26.4 billion units in quarter two FY 2027 compared to 23.7 billion units in quarter two of last year. H1 2027 volume grew 14.3% to 55.1 billion units. Sales under long-term and medium-term PPAs expanded by 29.7% to 23.4 billion units, reflecting increasing offtake by DISCOMs.
We also have a larger capacity operating under PPAs now as compared to last year. PPA realization improved by 12.7% on a continuing basis, supported by the pass-through of import coal indices and recent medium-term PPAs. Merchant and short-term volume were 43% lower year-on-year as we strategically tied up previously open capacities under medium-term contract. However, short-term merchant tariffs surged by 33% per unit, capturing strong demand momentum. Our total continuing revenue stood at INR 17,528 crore, which is 28.5% higher year-on-year basis. For H1 FY 2027, total continuing revenue stood at INR 35,464 crore, which is 27.5% high. During the quarter, we recognized one-time prior period revenue of INR 2,422 crore, and in comparison to that, quarter two last year, it was INR 669 crore.
Primarily arises from revision of the initial energy charges for the Gujarat PPA for which indexation has been applied in subsequent years. Including these one-time items, total reported revenue for quarter two FY 2027 reached INR 19,951 crore. H1 FY 2027 total reported revenue stood at INR 39,273 crore. Now on operating performance. Total fuel cost for quarter two FY 2027 increased by 40% to INR 10,229 crore compared to INR 7,216 crore in quarter two of last year. This rise was driven by increased volume, coupled with an approximate 50% increase in the landed cost of imported coal. For H1 FY 2027, fuel cost stood at INR 19,769 crore. Our continuing EBITDA for the quarter for FY 2027 was INR 6,321 crore compared to INR 5,333 crore in quarter two of last year. H1 FY 2027 continuing EBITDA grew by 20.1% to INR 13,304 crore.
Reflecting the recognition of prior period items, reported EBITDA grew by 45% to INR 8,743 crore in quarter two FY 2027. Finance costs for the quarter were INR 760 crore compared to INR 842 crore in quarter two of last year, driven by disciplined debt and liquidity management. For H1 2027, finance costs were INR 1,662 crore. Continuing profit before tax rose by 32% to INR 4,370 crore in quarter two FY 2027 from INR 3,298 crore in quarter two of last year. Reported profit before tax grew by 71% to INR 6,792 crore. The quarter included a net tax credit of INR 231 crore, which is due to the reversal of provisions made earlier following the amalgamation of subsidiaries with Adani Power. As a result, consolidated profit after tax for quarter two FY 2027 rose sharply by 141% to INR 7,019 crore compared to INR 2,906 crore in quarter two of last year.
For the first half of FY 2027, PAT stood at INR 11,886 crore, representing a 91% increase year-on-year basis. Moving to our balance sheet and capital position. We have kept a tight control on borrowings. We are funding our CapEx primarily through internal accruals. We rely on debt only to the extent of any gap between accruals and CapEx funding requirement. As of September 30, 2026, total debt stood at INR 61,860 crore compared to INR 53,556 crore as of March 2026. Net debt stood at INR 45,846 crore as of September 30, 2026, compared to INR 45,022 crore as of March 31st, 2026. Some of the funds drawn down by us near the end of the quarter are reflecting as cash balance. Our liquidity profile remains strong, enabling us to support our brownfield and greenfield CapEx program predominantly through internal accruals while maintaining conservative leverage metrics.
The recent credit rating upgrade to AA+ by CARE Ratings and India Ratings acknowledges this financial discipline, robust liquidity buffers, and predictability of cash flow. In summary, quarter two FY 2027 has been an excellent quarter for Adani Power. Sales volume increased by 11.5% to INR 26.4 billion unit with an operating PLF of 70.1%. Total continuing revenue grew by 28% to INR 17,528 crore, with continuing EBITDA expanding to INR 6,321 crore. Reported PAT grew by 141% to INR 7,019 crore. Our rating upgrade to AA+ and the operationalization of our subsidiary amalgamation significantly strengthen our capital profile and structural efficiency. Our organic expansion projects are progressing on schedule backed by discipline and self-funded capital allocation strategy. Thank you for your time and continued support. We are now ready to take your questions, if any. Thank you.
Thank you so much, sir. Ladies and gentlemen, we will now begin with the question- and- answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, in order to ensure that the management will be able to address all the questions from the participant, we request you to kindly limit your question to two questions only per participant. If you have a follow-up question, please rejoin the queue. We will wait for a moment while the question queue assembles. Thank you. First question comes from the line of Mohit Kumar with ICICI Securities. Please go ahead.
Yeah. Good afternoon, sir, and congratulations on a very good set of numbers. My first question is on the fuel cost, sir. I think the fuel cost has increased materially QoQ. If I do the numbers, it looks like the fuel cost has risen by 20%. Is there an element of tariff, PPA tariff, which you expect to increase further in Q3 as the coal cost prices have risen very sharply in the quarter?
There are different type of PPAs, and it will all depend on the type of PPAs. From the Adani Power perspective, if you are talking about from the market perspective, yes, tariffs has to go to some extent up, including the rates of merchant. As regards to Adani Power is concerned, the major increase in fuel cost is of the imported coal-based projects. Most of our capacity is passed through, except in case of Gujarat, it is linked to index, but in a way, that is also passed through. Obviously, it will have impact on the tariffs. As regards to the domestic coal is concerned, per se, Coal India has not increased any rates, but prices has slightly gone up. Because of the quality received in the second quarter, because of rainy season, it was quite poor.
Normally, when you receive poor quality of coal, the effective cost goes up. That is the phenomenon which we have normally every year in quarter two because of the monsoon season where the quality of coal goes down and therefore the per unit, the coal consumption will go up. But that will not get reflected directly in the tariffs. Thank you.
My question was, sir, was it an element of tariff? Was there a lag in the tariff versus fuel cost for the imported coal-based PPA, which has impacted negatively in the quarter? They were the questions, sir, primarily.
It has not impacted negatively because where we have the tariffs which are linked to index, it is only in case of Gujarat. In case of Gujarat also, the per unit realization was not less than the actual cost of fuel. Yes, in a way, it has impacted slightly because otherwise our margin would have been higher, which has gone down. This increase of fuel cost of imported one will get reflected almost after more than six months. It will not get reflected even in next quarter because the indexation mechanism is such that whatever fuel prices has remained in this quarter will not get reflected in next two quarters. Probably it will get reflected in the third quarter. Obviously it will have impact.
This is impact of Bangladesh PPA, sir? Is it right to say?
In case of Bangladesh PPA, it has positive impact because the Bangladesh tariff is determined based on the international prices. Whenever international price goes up, it is immediately get reflected in their billing. There is no question of time lag there.
Understood. Very helpful. My second question, sir. When do you expect the Lanco Korba two units to get commissioned? Is there any sight of PPA for Lanco Korba, or are you looking to sell this in the merchant for time being?
Yes, because the PPA will start after four years, and therefore for next four years, certainly it will be either sold in the medium-term or in the merchant. If we will get any PPA for the medium-term, we will get the coal linkage also. If we will sell this in the merchant, then in that case, obviously, we have to take the coal from the auctions.
Understood, sir. Thank you, and all the best. Thank you.
Thank you.
Thank you. Our next question comes from the line of Abhinav with ICICI Securities. Please go ahead.
Yeah, sir, thanks for the opportunity. My first question is on the, there have been certain reports of the thermal capacity addition getting extended beyond the 97 GW. That is the target for 2035. Just wanted some insights from your end on that particular topic. Yeah.
Yeah, it is a welcome news, obviously, and the Government of India has recognized this. You may be referring the statement of CEA Chairman, and we were also of the similar view earlier also, and that is the reason we have planned very aggressive capacity addition. This statement gives us more comfort. Let us say, we may have to again think about our strategy of capacity addition. Obviously, the statement is with reference to this time's quarter two shortages. We are of the view that probably it will further go up because we have not started getting the load of the data centers. Data centers are going to be power guzzlers, and data center will certainly require the base load thermal power because when the data center says that I want to consume the green power, they are only taking the green certificates.
Ultimately, reliable 24/7, it is not missing a second power can be supplied only by the thermal power projects. So the future of the thermal sector is quite bright, and which is obviously reflected in the statement of the government. Thank you.
Understood. My second question is on the other expense side. Other expenses have seen a decline QoQ and also on the other income, which has seen an increase QoQ. What is the reason behind it?
Just give me a moment. So other expenses reduction is due to reversal of the quarter-on-quarter basis, the provision of expenses, and other income is due to the mutual fund, so interest income, then the FD interest income. So on quarter-to-quarter basis, this time, the interest income from the fixed deposits, those are comparatively lower than the quarter two of last year. So primarily, this is the reason in reduction of other income. And expenses due to reversal of provision which we had made in the quarter two of the last financial year.
Understood. My final question is on the Uttarakhand PPA. What is the fixed charge over there that was signed during the quarter?
INR [inaudible]
Thank you, sir.
Thank you.
Thank you. Our next question comes from the line of Nikhil Nigania with Bernstein. Please go ahead.
Hi. Thank you for taking my question. My first question is on the Jaiprakash power assets where we hold a minority stake. I just want to check, barely-
Sorry to interrupt you, sir, but your voice is breaking.
Yeah. Hello. Is it better now?
Yeah. Please go ahead.
Yeah. My first question was on the Jaiprakash assets, where we hold a minority stake. Just wanted to know if there's any update on that or any plans to take our stake even higher.
At this moment, there's no change. As and when we will, let us say, evaluate, we'll inform the market. No change in the status as of now.
Got it. The second question is on future tie-ups. We can see a list of states which have ongoing tenders, UP, Gujarat, Bengal, Rajasthan. A, wanted to check if any of these are in advanced stage where we have submitted the bids as well, commercial bids. B, any plans to tie up in discussion for data centers or C&I customers that we are in?
Your first part is that the dates, in case of UP, the bids are already submitted and likely to be open, let us say, in this month or early next month. As regards to West Bengal is concerned, the West Bengal one bid of 1,600 MW is to be submitted in the first week of next month so far, unless it is extended because of upcoming Diwali holidays. In any case, but it will happen in the next month. Rajasthan is also submission is in first week of next month. Again, it is at advanced stage. As regards to Gujarat is concerned, Gujarat is, let us say, preparation is that they have done the bidder consultation, but they have yet to approach the regulatory commission, so they are slightly behind as regards to their level of progress is concerned.
Got it. Thank you so much. My last question was on the nuclear side. We have long plans till 2035, and given most of these assets take 10+ year to come, is there any update on our nuclear aspirations in terms of land or even indicative tariffs that we are looking at?
I think I forget your second question of the first part. Can I take that first?
Absolutely. Yeah.
What was that?
You had asked two questions, right? There were two parts.
Yeah. On nuclear. Yeah. Since nuclear plants take 10 years to make.
Nuclear is the second question. In the first question, there were two parts. What was the second part?
Yeah. Correct. That one was on business development opportunities related to data centers or C&I customers. Anything in questions on those lines, yeah.
Okay. In case of data centers, we are not signing the PPAs directly. With reference to data center, I said only with reference to demand overall at country level, which will obviously be made through the thermal projects. The tie-up will be either done with our AESL, the trading platform, or probably they may be tying up through the DISCOM , and therefore we are not dealing with the data center suppliers directly. It is dealt by our trading platform under the AESL. That is about the data center. As regards for your question related to nuclear power is concerned, the draft rules and regulation has been circulated for the comments and the process of taking comments from the stakeholders has been over, and we expect that the rules and regulation will be notified soon.
As soon as the rules and regulations will be notified, we will certainly take the capacity expansion forward. At this stage, other than we are waiting for the rules and regulation, there is no other update. Thank you.
Got it, sir. Thank you so much. Those were my questions. Thank you.
Thank you. Next question comes from the line of Swetha Rakhecha with Cantor Fitzgerald. Please go ahead.
Hi, Swetha here on the line for Manish. Congrats on a great quarter once again. I have a question for Khyalia, sir. With lower hydro availability supporting thermal dispatch in the second quarter as we saw, how should we think about coal-based generation, particularly Adani Power's PLFs if hydro generation returns to normal levels going forward?
The normal expectation of our thermal projects to deliver the PLF is around 65%. Because of the lower hydro availability this quarter, our PLF is 68% or so, I think.
71%.
This quarter is 70%. The half yearly is, I think, 68%.
74%, yeah.
Going forward, our normal expectation is 65%.
All right. Thank you, sir. I had one more follow-up on hydroelectricity in general. Given that we have long-term operating capacity targets for both thermal and nuclear, do we have any such targets for hydro? You mentioned we have two new projects in Bhutan and with the new asset that you have in Uttarakhand. I would love to know if you have any long-term operating capacity targets for hydro.
For hydro, Adani Power, as per the strategy of group, is supposed to take the hydro projects at international level only. Within the country, Adani Green is supposed to take the hydro projects. From that perspective, we have already signed a memorandum of understanding with Bhutan for 5,000 MW of hydro projects. Out of that 5,000 MW, as I stated in my earlier speech, we have already signed the shareholders' agreement with the Bhutanese partner for the 1,340 MW. As of now, our target is to reach this 5,000 MW.
Right. Thank you for clarifying. I had one more question on the one-time impact. Just following up on Mohit's question as well. Can we clarify whether we are going to see these revisions in the second half of 2027 as well?
Swetha, sorry, can you just repeat your question?
Yeah, Nishit. Th is is in regards to the one-time impact that we have on the income, the INR 2,422 crore. Just want to clarify if we are going to see this impact in the second half of 2027. Similar, like if there is any revisions to energy charges for the Gujarat PPAs.
Sure. Swetha, so actually the income that we have received, see, the nature of this income is actually there was a revision in the base rate, the fixation of the base rate to which indexation was to be applied under the revised terms with the Gujarat DISCOM . This was done with a retrospective effect. The calculation of the incremental income we were supposed to receive on the basis of that rate revision, that has now been given effect, and we have received the dues from the DISCOM in three installments over the course of the last two quarters. We have recognized all the revenue related to the past period on the basis of this rate revision, and all the past period recovery has been completed. On an ongoing basis, the impact of the rate revision is also there in the tariff that we charge the DISCOM .
That is recognized as part of the regular revenue. There is no past period recovery remaining in case of the Gujarat DISCOM as of now.
Nishit, you correctly guessed so PLF also. It was her question.
Yeah. The PLF that you were actually asking for the first quarter, we had a 78% PLF. The second quarter PLF was 70%. The average PLF we achieved is 74% for the first half.
Okay.
Right.
Thank you.
Thank you for clarifying. Yeah. Thank you.
Thank you. Our next question comes from the line of Apoorva Bahadur with IIFL Capital. Please go ahead.
Hi, sir. Thank you for the opportunity. In your notes to accounts, you have mentioned that there was a derecognition of revenue of about INR 19.720 odd billion for this alternate coal compensation claims with Haryana DISCOM. Can you throw some light on this as to why did we derecognize this and now what's our stance on this issue?
This is relating to the claims which we have raised regarding the domestic coal shortfall. There are certain issues starting from 2021- 2023 and onwards. The discussions are ongoing. At this stage to adopt the conservative accounting principle for the time being, we have reversed that. Though we have received the money, but we want to have a conservative approach. Unless it is completely settled and two parties are at same page, we thought that we should reverse it, though we have received the money. As soon as this issue is finalized and reached to a settlement, at that time we will give the appropriate accounting treatment.
This was the 50% of total amount which we had received, right? Not the 100%.
Correct.
50% of the claim.
50% of the claim which we-
Correct. 50% of the claim. Right. What has changed in your discussions? If you can just provide us some color that we have decided to provide for this despite receiving the amount. Because I recollect, our claim was quite strong.
See, there are two discussions which have happened in recent past. Since the issue is not closed, as per the advice of the auditors that when the issue is not completely settled, even accounting for 50% is also not comfortable to the auditors. We accepted their advice and based on that, we have reversed this. As and when this is finally concluded, when there is no dispute about that. Because when the payment is made 50%, that obviously indicates that other party has not fully accepted it. Once they will fully accept it, we will make the appropriate accounting treatment.
Understood, sir. Lastly, this is the entire amount, right? Or do we need to provide for anything else on this possibly?
No.
Would we also be providing for interest cost, say, if we have to refund?
No, there may be many other issues also. We don't foresee at this stage that there will be a net outflow of interest, because once you will settle all the issues, we hope that things will get adjusted and there shall not be any net outflow on the interest part. Nevertheless, we can't say or make any statement or forecast at this stage whether we have to make a small provision of interest or not. It all depends on how and what type of amounts either we will get or in any case, whatever we have got, we have reversed it, though the money is with us. Considering overall situation, we don't foresee much of any implication.
Sure, sir. Understood. Thanks a lot.
Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address all the questions from the participants, we request you to kindly limit your question to two questions only per participant. If you have a follow-up question, please rejoin the queue. Our next question comes from the line of Bhavik Shah with Invexa Capital . Please go ahead.
Yeah. Hello, sir. What I see in your investor presentation is at FY 2026, the continuing EBITDA was INR 21,000 crore. In H1 FY 2027, the continuing EBITDA is INR 26,000 odd crore. We have not added any capacity. So which all capacities have gone in for, say, recontracting, and how much EBITDA increase has been contributed by those capacity? Because I think our merchant is only 5%, right? So merchant will not play a major role here. Is that understanding correct?
Your voice is breaking actually. Sorry, we are unable to hear you. If you can repeat your question, it will be helpful for us.
Yeah. In your presentation, I am saying as of FY 2026, the continuing EBITDA was around INR 21,300 crore, and as of H1 FY 2027, when I analyzed the number, it is at around INR 26,000 odd crore. There is a INR 5,000 crore increase in the continuing EBITDA, whereas there has been no simultaneous increase in my capacity. So which all contracts have gone in for recontracting, and what is the, let's say, EBITDA impact from all these recontracting which we have done? Can you just help quantify that? Hello.
Wait for a moment, please. Yeah. Bhavik, actually, see, the reason behind the EBITDA growth primarily is, if you see in FY 2026, we had acquired some new capacity. Although the year-end capacity was of course there, this newly acquired capacity was not fully utilized for the full year. Now, yeah, in FY 2026. In the current year, we are utilizing these capacities fully. That is one part. We have also signed medium- term PPAs as compared to running these capacities in the merchant market intermittently earlier. We have been able to get full revenue and profitability at good tariffs because of the PPAs that we have signed over there. Secondly, we have also been able to get better profitability in some of our PPAs because of, you can say, the tariffs increasing in line with the international coal prices.
There is additional margin that we are also making in some of the PPAs now. In one of the plants that we have acquired earlier, that is the Mutiara or Tuticorin power plant, we have also utilized the plant capacity in a better way because now we have PPAs for both units of 600 MW and at a better tariff realization. There we also utilized domestic coal, right? Previously, this plant was running fully on imported coal. Now we are utilizing domestic coal to the extent of around 35%-40%. There the fuel cost has also come down, and our margins have improved. All of these things coming together are now giving us a better EBITDA margin as compared to the fiscal year 2026.
Should these fuel costs pass through are, say, not sustainable, right? Like in the coming quarter, we can vary significantly, right?
Sorry, your voice is not very clear, Bhavik. Can you repeat that?
Yeah. I am saying these fuel cost increases will vary as per the quarters, right? These are not sustainable in nature, right?
Yes. So actually, see, we have certain projects, certain plants where we have PPAs, where we are utilizing imported coal. So in all those PPAs, we get a pass through.
Understood. And sir, when can we see Korba, in which quarter, and then Mahan in which quarter coming up?
The Korba Unit 3, that is the first 660 MW unit, we have recently synchronized it. We expect that it should be commissioned very soon. So in the third quarter, it should start operating. And the second unit of Korba is expected to start operating by around December.
Okay. And sir for Mahan-
Thank you, sir. You may please rejoin the queue for more questions. You have already asked two questions. Thank you. Thank you. Our next question comes from the line of Kriti Tripathi with NVS Brokerage. Please go ahead.
Hello. Sir, firstly, congratulations on delivering a strong set of numbers in Q2. Sir, looking at this performance, can we expect H2 FY 2027 to follow a similar strong growth trajectory? And also, do you expect the overall power sector to continue its excellent momentum in FY 2028 as well? Thank you, sir.
Yeah. So actually, Kriti, we would not like to give any guidance on such granular basis. We have given our full year guidance. As compared to the initial expectations at the start of the year, the power market has actually performed better. So obviously there is an increase overall, profitability has also improved in line with that. Next year also, we expect the power market to be quite strong given the pattern of demand and the way the demand has been growing. So I think that our expectations are being borne out and the plans that we have made in terms of our capacity expansion are also very much in line with the growth in demand that we are expecting.
Okay. Thank you, sir.
Thank you. Our next question comes from the line of Mohit Kumar with ICICI Securities. Please go ahead.
Yes. Hi. Thanks for the opportunity once again. My first question is, under the new bids which are happening for the long-term PPA, be it the UP, West Bengal, Gujarat or AP, is there a restriction that the power plant has to be commissioned within the state? Can you just please clarify, sir?
The UP bid doesn't say so it is anywhere in India. The Rajasthan bid says so, which states that the power plant has to be in Rajasthan. The West Bengal bid mentioned the location itself, so it is location-specific bid, which is basically at their existing power plant. As regards to Gujarat is concerned, they have not specified any place, so their bid is also anywhere in India. Rajasthan is state-specific, West Bengal is location-specific, and UP and Gujarat are anywhere in India. Thank you.
Understood. My second question is, have you identified power plant for the Uttarakhand PPA? Is the Korba being assigned to the Uttarakhand?
Yeah. I already mentioned this, that Korba is already assigned to Uttarakhand, and since Uttarakhand power will start after four years. So I replied that we will be looking for either medium-term or merchant during these four years.
Understood, sir. Thank you and all the best. Thank you.
Thank you.
Thank you. Our next question comes from the line of Vishal Periwal with PL Capital. Please go ahead.
Yes, sir. Thanks for the opportunity. Sir, out of our 18 GW of operational portfolio, what sort of tie-up we have done with AESL?
We have not done any tie-up with AESL.
Okay. Maybe
It is entirely with third- parties.
Okay. And maybe for our under-construction portfolio that we have with capacity still open. Any tie-ups that we have done even for the under-construction, or it's still not done anything with AESL?
So far we have not done anything.
Okay. I think just one clarification. You said the margins were a little lower in this quarter. Is it possible to give a breakup of our EBITDA, which is, say, coming from the merchant capacity charge, energy charge? Could that number be handy with me?
Yeah. You can connect with Nishit, who is our Investor Relations Head, for all these granular details on one-to-one basis. We will be happy to share with you all these details.
Okay. Sure, sir. I will come back in the queue. Thank you very much.
You are most welcome.
Thank you. Next question comes from the line of Shirom Kapur with Jefferies. Please go ahead.
Hi, sir. Thanks for the opportunity. Just a quick question on your finance costs. You had mentioned in your opening remarks that they have come down due to disciplined debt and liquidity management. But if you could just comment a little further on are you seeing lower average interest rates? Because your debt has gone up year-on-year, but your finance costs have come down. How do we see it even going ahead? Is it expected to continue to remain at a lower level? If you could provide some color.
Yes. You rightly pointed out that our debt has gone up. From the previous, on 31st March 2026 and as on 30th September, this is the number is INR 61,000 crore. But at the same time, if you will see the net debt, this is almost flat, same. It is near about INR 45,000 crore. The debt has been increased, but we have kept sufficient liquidity in the balance sheet. There is no movement of the net debt in half year. At the same time, you will notice that we have also received this significant amount from GUVNL, which is near about INR 6,000 crore. That also added in our internal accrual. We follow a very tight control on liquidity management and its deployment. This is very, very significantly we are monitoring all these activities.
So that's why though the debt has been increased, there is no increase in the net debt. Due to receipt of all these payment from the DISCOM , resulting into we are maintaining almost the flat financing cost. In fact, there is a little bit reduction if you will compare with quarter-to-quarter basis.
Great, sir. So this is sort of a steady state that we can see going ahead? Because last quarter you did INR 900 crore and this quarter is about INR 760 crore of interest. So is this sort of a steady state we see going ahead, or would it rise further from here?
So what you have observed that though in the market link interests are increasing, but at the same time, our credit ratings are also increasing. So we have now achieved AA to AA+. Due to increase in the credit rating and all these things, we are expecting that the interest cost and financing cost will be on flat line basis. At least what we are putting all these efforts to maintain this flat line.
Got it, sir. Thank you so much.
Thank you.
Thank you. Our next question comes from the line of Bharat Shah with Bharat Shah Capital Ideas Private Limited. Please go ahead.
Namaskar. Hello, Dilipji.
Namaste, sir.
Namaskar. In the presentation you have indicated by 2032, 42 GW capacity. I was under impression it is 46 GW, unless I have got it wrong.
Sorry.
Hello.
Bharat bhai, sorry, we could not understand. What 6 GW are you speaking about?
No, I am saying in the presentation, capacity build-up that we have talked about, from the current 18 GW to about 42 GW by 2032. My question is, my impression was it was 46 GW by that time, unless I have got that number wrong.
Bharat bhai, the right position is somewhere in between. We have said that it would be 45 GW by that time, if you can see the note in bottom of the presentation. 42 GW is taking up from the new capacity, 18 GW to 42 GW. 3 GW we are expecting will be added through the inorganic acquisitions. Which you are aware that in pipeline. That is the way it is taking up to 45 GW, and it is mentioned in the note below the presentation in many of the slides, even at slide number 12 also it is there.
Okay. Sure. Thank you. Thank you for that clarity. Secondly, our credit rating at AA+, I think still is lower than where it actually deserves to be. Because we have not really any borrowing for ongoing operations. Our ongoing operations are more than fully funded out of our internal generation. Our entire borrowing is actually for the new projects. Therefore, in my opinion, given the nature of the business and strong tie-ups and predictability, this deserves to be rated higher than AA+, is my impression.
Thank you, Bharat Shah, for your trust and confidence in our company and analyzing is so great. We are also taking up with the rating agencies in similar way. Whatever you have said, these are exactly my views also. In my recent discussion, I gave exactly this argument saying that my entire borrowing, it can be easily, let us say, serviced from my existing operations. Even the borrowings which we have taken slightly for the new capacities, that borrowing can also be serviced from our existing profitability, EBITDA, et cetera. We hope that it will get improved. The rating agencies will accept our confidence of our investors like you, and that will help us also. Your statement will help us to take up strongly with the rating agencies that this is the expectation of our investors. Thank you.
Okay. Thank you. One more thing. What is the peak debt expected in this journey from 2026- 2032?
Peak debt.
Peak.
Peak debt. Peak debt, we are expecting that it will be around INR 1 lakh crore each year. It will be by 2030, 2031.
By 2030, 2031, peak debt will be about INR 1 lakh crore. Roughly 2x where it is today.
Sorry.
Roughly 2x what it is currently there.
Currently, yeah. You are right, Bharat bhai. Nearly double what it is today. Yeah.
Okay. Since Dilipji has mentioned INR 1 lakh crore debt is the peak debt, I am tempted to ask this question. When do we expect the EBITDA to be INR 1 lakh crore in this journey?
Yeah. Bharat bhai, giving that type of statement would be disclosing or talking too far a thing. It will not be appropriate for us to make that statement at this stage.
All right.
I expect that you are a very knowledgeable person, and based on whatever PPAs we are signing and whatever capacity we are adding, you can very well do calculation and you will be more correct than us.
Thank you. I was just being lazy and trying to check, but I can very much figure that out. Thank you so much and all the very best.
Thank you.
Thank you so much. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing remarks. Thank you, and over to you, team.
Thank you so very much for your continued support, guidance, and engagement with us. We tender our respect and gratitude to each of you, and we are looking forward the same support and engagement with us in days to come in future. Thank you. Thank you so very much. Have a great day.
Thank you so much, sir. Ladies and gentlemen, on behalf of Antique Stock Broking Limited, that concludes today's call. Thank you for joining us, and you may now disconnect your lines.