Analysis
Nifty 200 power cos' Q3 PAT beats estimates, revenue misses mark
This story was originally published at 10:05 IST on 28 February 2025
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By Akshay V. Johnson
MUMBAI - Of the 10 power companies that make up the Nifty 200 Index, six exceeded analysts' expectation of a 3.02% on-year fall in net profit for the sector. Four companies met or exceeded the consensus view for revenue growth for the sector, whereas six did not meet the expectations.
The net profit growth of NLC India Ltd., NTPC Ltd., Power Grid Corp. of India Ltd., Suzlon Energy Ltd., Tata Power Ltd., and Torrent Power Ltd. exceeded the sector average estimate, whereas the revenue growth of NHPC Ltd., NLC India, SJVN Ltd., and Suzlon Energy exceeded the sector average estimate. While there are actually 14 power companies in the Nifty 200, estimates are not available for four Adani group firms - Adani Energy, Adani Enterprises, Adani Green energy, and Adani Power.
Of the 10 companies in the sector for which estimates were available, five companies' net profit for the December quarter beat the Street's estimate at the company level. Five did not meet the consensus view at the company level, and this dragged down the sector's performance.
The average net profit growth for these 10 companies beat the Street's estimates for the December quarter, but the average growth in net revenue from operations was below expectations. While analysts had expected a fall of 3.02% in the net profit of these companies, the net profit reported by these companies was up marginally. However, including exceptional items, their net profit would have fallen nearly 6% on year.
On revenue growth, these companies failed to meet the consensus estimate. The revenue of these companies grew just above 4%, below the nearly 6% growth estimated by analysts.
The net profit of 14 power companies, including the four Adani group companies, fell just over 2%. Out of the 14 companies in the sector, nine reported an on-year rise in net profit. The sector had a net profit margin of 14.7%, down from a margin of 16.5% in the year-ago quarter. In the September quarter, the margin was 15.7%.
The sector, as a whole, recorded an exceptional loss of INR 15.43 billion. NLC India had the highest exceptional loss of INR 7.78 billion. This amount has been put under the regulatory deferral liability for a pending effect order from Central Electricity Regulatory Commission. Adani Energy Solutions and Tata Power Co. were the other companies that recorded an exceptional loss of INR 4.65 billion and INR 2.74 billion, respectively.
The 26% on-year rise in other income played a significant role in limiting the net losses for the companies in the power sector. If the other income had been the same as in the year-ago quarter, these companies' net profit for the December quarter would have fallen 9.2% on year.
NLC was the best performer in the sector, with its net profit more than doubling on year. It had the highest net profit growth both in absolute and percentage terms. The profits were driven by a 40% rise in revenue, which outpaced total expenses.
Suzlon Energy, Adani Green Energy, Adani Energy Solutions, and Torrent Power were the other companies that reported good growth in net profit. Adani Green Energy's net profit nearly doubled on year because of a low base in the year-ago quarter due to a one-time hit of INR 1 billion on account of some expenses related to debt refinancing. The company also received a tax write-back of INR 1.15 billion for the December quarter.
Suzlon's net profit rose 90.6% on year, as volumes more than doubled on year. Adani Energy Solution reported a 73% jump in consolidated net profit, helped by higher sales and a deferred tax reversal of INR 1.85 billion. Torrent Power reported net profit growth of 32% on year led by the sale of non-current investments and higher contribution from its gas-based power plants.
Coal India and Adani Enterprises were the worst performers among the major players in the sector. Coal India, which accounts for nearly 35% of the sector's profit, posted a fall in net profit of more than 17% on year for the December quarter. The fall in net profit was largely on account of falling e-auction prices and lower sales due to muted demand. Adani Enterprises' net profit for the December quarter fell nearly 97% on year, largely on account of a drop in revenue from its core businesses, a rise in the cost of raw material, and higher taxes.
In terms of revenue growth, Suzlon Energy was the best performer and reported higher than 90% growth, similar to the growth it reported in its net profit. Adani Enterprises was the worst performer in terms of revenue; its revenue fell nearly 9% on year, against an increase of 6% estimated for the sector. Power Grid Corp. and JSW Energy also reported dismal performances, with their revenue falling 5% and 4% on year, respectively.
Total expenses for the sector rose nearly 3% on year. Power and fuel expenses, which accounted for 33% of the total expenses, were up more than 10%. Finance costs rose 12% on year.
POWER GENERATION
Out of the 14 power companies, 10 primarily operate in the power generation space. In this space, the companies' net profit declined 12.4% on year. Sequentially, the net profit fell 6%. Had it not been for exceptional items, the net profit would have fallen nearly 9% on year and nearly 3% sequentially. NLC India, Suzlon Energy, and Adani Green Energy were the best performers in terms of profit growth, whereas Adani Enterprises and NHPC were the worst.
The sector's net revenue rose 2% on year and 5% sequentially. NLC India and Suzlon Energy were the best performers in terms of revenue growth, while Adani Enterprises and JSW Energy were the worst performers.
POWER TRANSMISSION
Out of the 14 power companies, four primarily operate in the power transmission space. These companies' net profit grew 6% on year in the December quarter. Sequentially, it was up 3%. However, excluding exceptional items, the net profit would have risen 22% on year and 4% sequentially. The sector's revenue grew 4% on year. Adani Energy, Tata Power, and Torrent Power registered on-year growth in net profit and revenue, while Power Grid posted an on-year fall.
The following table shows the performance of the 14 companies in the power sector vis-a-vis the consensus estimate for each company as well as against the consensus estimate for the power sector and the Nifty 200 index.
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| Company | PAT beat analysts' estimate | Adjusted PAT growth % | Adjusted PAT growth estimate % |
PAT beat sector estimate | PAT beat Nifty 200 estimate | Revenue beat analysts' estimate | Revenue growth % | Revenue growth estimate % |
Revenue beat sector estimate | Revenue beat Nifty 200 estimate | |||||
| Adani Energy Solution Ltd. | NA | 168.95 | NA | NA | NA | NA | 27.78 | NA | NA | NA | |||||
| Adani Enterprises Ltd. | NA | -96.94 | NA | NA | NA | NA | -8.79 | NA | NA | NA | |||||
| Adani Green Energy Ltd. | NA | 42.70 | NA | NA | NA | NA | -1.08 | NA | NA | NA | |||||
| Adani Power Ltd. | NA | 11.66 | NA | NA | NA | NA | 5.23 | NA | NA | NA | |||||
| Coal India Ltd. | No | -17.05 | -16.95 | No | No | No | -1.03 | -1.03 | No | No | |||||
| JSW Energy Ltd. | No | -27.45 | 84.24 | No | No | No | -4.09 | 22.75 | No | No | |||||
| NHPC Ltd. | No | -49.55 | 17.23 | No | No | Yes | 16.24 | 12.47 | Yes | Yes | |||||
| NLC India Ltd. | Yes | 681.04 | 34.61 | Yes | Yes | Yes | 39.41 | -5.16 | Yes | Yes | |||||
| NTPC Ltd. | No | 3.05 | 7.41 | Yes | No | No | 4.81 | 6.38 | No | Yes | |||||
| Power Grid Corp. of India Ltd. | No | -1.92 | -0.22 | Yes | No | No | -5.21 | 6.94 | No | No | |||||
| SJVN Ltd. | Yes | -13.15 | -15.11 | No | No | Yes | 16.49 | 9.29 | Yes | Yes | |||||
| SUZLON ENERGY Ltd. | Yes | 90.56 | 57.01 | Yes | Yes | Yes | 90.64 | 81.93 | Yes | Yes | |||||
| Tata Power Co. Ltd. | Yes | 70.87 | 38.62 | Yes | Yes | No | 5.05 | 17.60 | No | Yes | |||||
| Torrent Power Ltd. | Yes | 32.19 | 7.47 | Yes | Yes | Yes | 2.09 | -8.63 | No | No | |||||
The following table shows the profit margins of the 14 power companies that are a part of the Nifty 200.
| PAT margin for Dec-24 | PAT margin for Dec-23 | PAT margin for Sept-24 | |
| Power sector | 14.69% | 16.50% | 15.70% |
| Nifty 200 | 11.87% | 11.51% | 11.37% |
| Company | PAT margin for Dec-24 | PAT margin for Dec-23 | PAT margin for Sept-24 |
| Power sector | 14.69% | 16.50% | 15.70% |
| Nifty 200 | 11.87% | 11.51% | 11.37% |
| Adani Energy Solution Ltd. | 9.64% | 7.12% | 10.92% |
| Adani Enterprises Ltd. | 0.25% | 7.54% | 7.70% |
| Adani Green Energy Ltd. | 21.52% | 11.08% | 9.03% |
| Adani Power Ltd. | 22.36% | 21.08% | 24.98% |
| Coal India Ltd. | 23.77% | 28.36% | 20.50% |
| JSW Energy Ltd. | 6.88% | 9.10% | 26.35% |
| NHPC Ltd. | 13.89% | 32.00% | 35.23% |
| NLC India Ltd. | 15.14% | 7.91% | 24.93% |
| NTPC Ltd. | 11.39% | 11.59% | 11.53% |
| Power Grid Corp. of India Ltd. | 38.48% | 37.19% | 36.17% |
| SJVN Ltd. | 22.28% | 25.22% | 47.57% |
| SUZLON ENERGY Ltd. | 13.01% | 13.01% | 9.52% |
| Tata Power Co. Ltd. | 6.70% | 6.50% | 5.90% |
| Torrent Power Ltd. | 7.32% | 5.65% | 6.70% |
End
Edited by Avishek Dutta
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