Adani Power margin rebounds to 36.02%, but stock falls 3.69% next day
Revenue growth outpaced expenses, while a higher tax rate reduced the flow-through from a 49.86% rise in pre-tax profit to net profit.
Filed 22 Jul 2026, 13:52 IST · Adani Power Ltd (ADANIPOWER)
Key takeaways
- Revenue grew 33.97% YoY while expenses rose 30.03%, lifting operating margin by 1.76 percentage points.
- Operating margin rebounded 8.78 percentage points QoQ to 42.05% after declining through Q4FY26.
- The stock fell 1.55% on results day, a larger move than its 1.17% median absolute post-results move across eight quarters.
Price around the results
Volume-led rebound in Q1FY27
Adani Power's consolidated revenue increased 33.97% YoY and 32.90% QoQ, while operating profit grew faster at 39.81% and 67.96%, respectively. Management attributed Q1 FY27 EBITDA growth to higher volumes and an improved contribution margin. The QoQ acceleration also reversed the operating-margin decline seen from 40.29% in Q1FY26 to 33.27% in Q4FY26.
Slower cost growth supported margins, but tax limited conversion
Expenses grew 30.03% YoY and 15.41% QoQ, below revenue growth in both comparisons, widening operating margin by 1.76 percentage points YoY and 8.78 percentage points QoQ. Interest expense fell 6.81% QoQ but rose 5.19% YoY, while other income contributed 8.38% of pre-tax profit, leaving operating earnings as the main profit driver. The tax rate rose 21.6 percentage points QoQ, from a low Q4FY26 base, so net profit grew 13.93% QoQ despite a 46.40% rise in pre-tax profit.
Margin moves above the Utilities peer median
The 42.05% operating margin was 5.03 percentage points above the 37.02% median for the 14 Utilities peers that had reported the same quarter. Sequentially, this was a clear recovery from 33.27% in Q4FY26 rather than a continuation of the prior three-quarter decline. On a YoY basis, however, the improvement was more modest at 1.76 percentage points.
Management outlines a large capacity pipeline
The presentation says Adani Power is targeting base-load capacity of 45 GW by FY31-32 and is expanding 23.7 GW of thermal capacity with estimated capex of Rs 2 trillion by then. Management also said the company is targeting a further 3 GW of generation capacity, alongside a 570 MW Bhutan hydro project estimated to cost Rs 60 billion. The presentation separately flags a target of 10 GW of nuclear capacity by 2035 and the establishment of Adani Atomic Energy Ltd. for nuclear investments.
Initial market response was weaker than its usual move
The shares fell 1.55% on the results day and were down 3.69% on the next session; the five-session move was -4.92%. The initial decline was larger than the stock's 1.17% median absolute post-results move across eight quarters, during which it fell five times and rose three times.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹18,902 cr | ₹14,223 cr | +32.90% | +33.97% |
| Other income | ₹538 cr | ₹1,766 cr | -69.53% | +15.83% |
| Expenses | ₹10,953 cr | ₹9,491 cr | +15.41% | +30.03% |
| Operating profit | ₹7,949 cr | ₹4,732 cr | +67.96% | +39.81% |
| Operating margin (%) | 42.05% | 33.27% | — | — |
| Interest | ₹901 cr | ₹967 cr | -6.81% | +5.19% |
| Depreciation | ₹1,167 cr | ₹1,147 cr | +1.74% | +7.22% |
| Profit before tax | ₹6,418 cr | ₹4,384 cr | +46.40% | +52.66% |
| Tax | ₹1,552 cr | ₹113 cr | +1278.20% | +72.55% |
| Net profit | ₹4,867 cr | ₹4,271 cr | +13.93% | +47.24% |
| EPS (₹) | ₹2.49 | ₹2.08 | +19.71% | -71.11% |
Operating margin of 42.05% compares with a Utilities sector median of 37.02% across 14 peers that have reported Q1FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -1.55% | -0.76% |
| Next session | -3.69% | — |
| 5 sessions | -4.92% | -5.18% |
Volume on the results session was 1.46× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Q1 FY27 EBITDA growth was attributed to higher volumes and improved contribution margin.
Guidance & outlook
- The presentation expects power demand to increase fourfold over the next two decades.
Expansion
- APL targets expanding base-load power capacity to 45 GW by FY 2031-32.
- APL is expanding 23.7 GW of thermal power plants with estimated capex of ₹2 trillion by FY31-32.
- APL has targeted further additions of 3 GW of generation capacity.
- APL's first Bhutan hydro project will have 570 MW capacity and estimated cost of ₹60 billion.
- APL is targeting 10 GW of nuclear power capacity by 2035, with project sites identified.
New initiatives
- APL is entering Bhutan's international hydroelectric power sector through a partnership with DGPC.
- APL established Adani Atomic Energy Ltd. as a wholly owned subsidiary for nuclear power investments.
What to watch
- Whether operating margin holds above 42.05% after the Q1FY27 rebound.
- Whether revenue growth remains ahead of expense growth, which was 33.97% versus 30.03% YoY.
- Whether the tax rate normalises from 24.17% without repeating the Q4FY26 base distortion.