Numbers

Qwen View

Price & Valuation Snapshot

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The stock trades at a high P/E (34.4x) despite extreme earnings volatility. The critical metric for rerating is sustainable operating margin expansion, which has swung from 19% (Q2 FY2026) to 41% (Q1 FY2025) across cycles.

Cash Flow Dynamics

Operating cash flow surged to ₹215B (FY2025) but free cash flow collapsed to ₹43.59B due to massive capex (₹171B). This divergence highlights capital intensity risks in the power generation business model.

Balance Sheet Evolution

The balance sheet transformed from debt-heavy (FY2018: 528B debt vs 8.89B equity) to equity-dominant (FY2025: 394B debt vs 563B equity). Net debt/EBITDA now sits at healthy 1.4x (FY2025).

Peer Comparison (Electric Utilities)

Adani trades at a premium but delivers superior ROE (26.1%) and EPS growth. Its low debt/equity ratio (0.65) vs peers (>1.0) suggests stronger financial flexibility.

Key Takeaways

The numbers confirm:

• Exceptional operating leverage with margins expanding to 38% (FY2025)
• Strong cash conversion with operating cash flow growing 13% CAGR since FY2014
• Balance sheet derisking with debt/EBITDA down to 1.4x from 6.5x in FY2018

The critical watchpoint: Q2 FY2026 saw a margin compression to 34% amid rising interest expenses. If margins remain below 35% in FY2026, the current P/E multiple could face compression pressure.