Aug 27, 2021 - In yet another impressive performance that will surely boost investors’ confidence, Adani Enterprises posted solid numbers in the first quarter of FY22. Net consolidated profit stood at Rs. 265.60 crore in comparison to the net loss of Rs. 65.67 crore for the same quarter last year.
Despite the second coronavirus wave that dashed any hopes of a quick recovery, the Gautam Adani-led conglomerate has held its ground admirably. The company rode the high generated by its established businesses, especially the solar and mining operations. Mining productivity has steadily increased for Adani; Talabira II and III, Parsa Kente and Kurmitar mines all witnessing an increase in production volume.
The Parsa Kente mine saw production levels rise by 55 per cent Year-on-Year (YoY) to 3.1MMT while production doubled to 0.4MMT at Gare Palma. Both mines are located in the state of Chhattisgarh. Meanwhile, production levels at Talabira II and III (Odisha) and the newly constructed iron mine in Kurmitar stood at 0.4MMT and 0.7MMT, respectively.
Increased production levels can be attributed to the growing demands for power as the economy gets back on track. Rising power demands are to be expected as lockdown restrictions are being lifted. For players like Adani Talabira, Parsa Kente and other operational mines are not just an efficient way but also a robust way of meeting power requirements of a resurgent India. Currently, thermal power generation is the most cost-efficient way to fulfil energy demands of the growing nation.
According to ICRA, demand for electricity is expected to increase by 6 per cent YoY in FY22. The somewhat blunt impact of the second wave coupled with mass vaccination drives has provided a favourable base for growth this fiscal. June 2021 recorded a spike in power demand with a month-on-month (MoM) increment of 3.9 per cent. Furthermore, ICRA also expects an addition of 17-18GW to India’s power generation capacity in FY22. In the last fiscal, the addition to power generation capacity was 12.8GW.
The second tranche of coal mine auctions is taking place in a parallel development. Out of the 67 mines on offer, 34 bids have already been placed for 19 mines. The total resource base of the mines stands at 36 billion tonnes and with the global window for fossil fuels growing shorter, this is a golden opportunity for stakeholders like Vedanta, Aditya Birla and Adani. Talabira, Parsa Kente, Madanpur South and other coal blocks will continue play a significant role in addition to the 67 mines going under the hammer.
India is at a precarious point where it needs to judiciously balance its power requirements and power generation. Although the shift towards green energy cannot be denied, it would be foolhardy to do away with conventional power generation methods. Coal will remain king for some time in the future until renewable power is versatile enough to meet India’s energy demands.
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