Adani Transmission Q3 profit jumps 78% on healthy operating margin, stock down 10%

Adani Transmission on February 6 reported a massive 78 percent year-on-year growth in consolidated profit at Rs 474.72 crore for the quarter ended December FY23, but the stock remained in lower circuit.

The Adani Transmission stock was locked in 10 percent lower circuit for third consecutive session on Monday, falling 54 percent in last 10 trading sessions, especially since after US-based short seller Hindenburg Research accused the Adani Group of stock manipulation and accounting fraud scheme.

The Adani Group-led transmission and distribution company in its exchange filing said the profit was aided by a one-time income of Rs 240 crore from a regulatory order and the consolidated cash profit of Rs 955 crore in Q3FY23 increased by 34 percent YoY.

It registered a 22 percent growth in revenue for the quarter at Rs 3,552 crore compared to the year-ago period, led by new transmission lines becoming operational and a positive trend in energy demand.

Transmission business revenue growth of 13 percent was driven by newly commissioned JKTL and WRSS XXI (A) and recently commissioned lines, while distribution revenue increased 17.1 percent on account of a consistent uptick in energy demand, the company said. The transmission business revenue growth excluded the one-time income from regulatory order and the growth after including the same comes to 44 percent.

Adani Transmission further said operational EBITDA in both segments (transmission and distribution) grew by double-digit during the quarter (i.e. 12.7 percent and 13.3 percent, respectively).

At the operating level, its EBITDA (earnings before interest, tax, depreciation and amortisation) increased by 64 percent to Rs 1,478 crore for the quarter, with margin climbing by 1,066 bps to 41.6 percent compared to corresponding period of last fiscal.

“The impact of increase in coal prices and power purchase costs in recent periods has been partly offset by fuel adjustment charges’ (FAC) recovery in monthly billing,” the company said. The cost of power purchased for the quarter increased by 1 percent to Rs 829.66 crore and cost of fuel rose by 22.5 percent to Rs 353.11 crore compared to year-ago period.

Energy demand (units sold) improved by 4.4 percent YoY in Q3FY23, driven by a rise in commercial segment demand, while distribution losses were reduced to 5.6 percent, and collection efficiency remained above 100 percent, Adani Transmission said.

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