Quarterly Financial Performance: A Decline in Core Metrics
The December 2025 quarter has been challenging for Adani Power, with net sales plummeting to ₹12,451.44 crores, marking the lowest quarterly revenue figure in recent periods. This decline is significant when compared to the company’s previous four-quarter average, indicating a contraction in demand or pricing pressures within the power sector. Correspondingly, the Profit Before Depreciation, Interest and Taxes (PBDIT) also fell sharply to ₹4,238.07 crores, the lowest recorded in recent quarters, signalling margin compression.
Profit After Tax (PAT) for the quarter stood at ₹2,479.58 crores, reflecting a steep fall of 17.6% relative to the average PAT over the preceding four quarters. Earnings Per Share (EPS) also declined to ₹1.29, the lowest quarterly EPS in the recent cycle, underscoring the impact of reduced profitability on shareholder returns.
Return Ratios and Capital Efficiency Under Pressure
Return on Capital Employed (ROCE) has deteriorated to 17.69%, the lowest half-yearly figure recorded for the company. This decline in capital efficiency suggests that the company is generating less profit per unit of capital invested, which may raise concerns about operational effectiveness and asset utilisation. The Debt-Equity ratio has increased to 0.83 times, the highest in the half-year period, indicating a rise in leverage that could amplify financial risk amid subdued earnings.
Positive Cash Flow Indicators Amidst Challenges
Despite the negative earnings trend, Adani Power’s cash and cash equivalents have reached a record high of ₹10,291.04 crores for the half-year, providing a liquidity cushion. Additionally, the Debtors Turnover Ratio has improved to 5.88 times, the highest in the half-year period, reflecting enhanced efficiency in receivables collection. These factors may provide some operational flexibility as the company navigates the current headwinds.
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Stock Price Movement and Market Sentiment
Adani Power’s share price closed at ₹133.75 on 30 January 2026, down 0.82% from the previous close of ₹134.85. The stock traded within a range of ₹132.60 to ₹136.50 during the day. Over the past 52 weeks, the stock has seen a high of ₹182.75 and a low of ₹93.23, reflecting significant volatility. Recent weekly and monthly returns have been negative, with a 1-week return of -5.01% and a 1-month return of -4.91%, underperforming the Sensex which gained 0.31% and lost 2.51% respectively over the same periods.
Long-Term Performance Outshines Benchmark Despite Recent Weakness
While short-term performance has been disappointing, Adani Power’s long-term returns remain impressive. The stock has delivered a 1-year return of 28.03%, substantially outperforming the Sensex’s 7.88% gain. Over three years, the stock’s return stands at 169.60% compared to the Sensex’s 39.16%, and over five years, it has surged by 1203.61% against the benchmark’s 78.38%. Even on a decade-long horizon, Adani Power’s return of 2238.29% dwarfs the Sensex’s 231.98%, highlighting the company’s strong growth trajectory over the long term despite recent setbacks.
Mojo Score and Grade Downgrade Reflect Heightened Caution
MarketsMOJO’s latest assessment downgraded Adani Power’s Mojo Grade from Hold to Sell on 31 July 2025, reflecting the deteriorating financial trend and rising risks. The company’s Mojo Score currently stands at 42.0, signalling weak fundamentals relative to peers in the power sector. The Market Cap Grade remains at 1, indicating a relatively low market capitalisation ranking within the sector. This downgrade underscores the need for investors to exercise caution given the negative financial momentum and margin pressures.
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Sector Context and Industry Challenges
The power sector in India has been grappling with multiple challenges including fluctuating fuel costs, regulatory uncertainties, and demand variability. Adani Power’s recent financial contraction may partly reflect these sector-wide headwinds. Margin pressures have intensified as input costs rise and tariff realisations remain under pressure. The company’s increased leverage, as indicated by the rising debt-equity ratio, could further constrain its ability to invest in growth or weather prolonged downturns.
Outlook and Investor Considerations
Given the negative financial trend and margin contraction, investors should approach Adani Power with caution in the near term. While the company’s strong cash position and improved receivables turnover provide some operational resilience, the declining profitability and capital efficiency metrics raise concerns about sustainable earnings growth. The downgrade to a Sell rating by MarketsMOJO reflects these risks and suggests that investors may want to consider alternative opportunities within the power sector or broader market.
Long-term investors may still find value in Adani Power’s historical outperformance relative to the Sensex, but should closely monitor upcoming quarterly results for signs of recovery or further deterioration.
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