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Tuesday, May 13, 2025

Adani Power Secures 1,500 MW Supply Contract with Uttar Pradesh; $2 Billion Investment Planned

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Adani Power Secures 1,500 MW Supply Contract with Uttar Pradesh; $2 Billion Investment Planned

India's Largest Private Thermal Power Generator to Build Ultra-Supercritical Power Plant Under DBFOO Model

In a significant development for India's power sector, Adani Power Ltd has emerged victorious in a competitive bidding process to supply 1,500 MW (net) of thermal power to Uttar Pradesh. The company announced on May 10, 2025, that it will establish a state-of-the-art greenfield power plant to fulfill this substantial contract.

Contract Details and Investment Plans

Under the terms of the agreement, Adani Power will supply electricity at a highly competitive tariff of ₹5.383 per unit from a planned 2x800 MW ultra-supercritical power plant. This modern facility will be developed using the Design, Build, Finance, Own, and Operate (DBFOO) model within Uttar Pradesh.

The Uttar Pradesh cabinet had already approved this significant energy project earlier this month. Following this win, Adani Power will proceed to sign a long-term Power Supply Agreement (PSA) with the Uttar Pradesh Power Corporation Ltd. (UPPCL) under the Letter of Award (LoA).

S.B. Khyalia, Chief Executive Officer of Adani Power, expressed enthusiasm about the project, stating: "We are happy to have won the competitive bid to supply 1,500 MW power to UP and feel privileged to play a leading role in meeting the state's rapidly growing power demand. We plan to set up a modern and low emission ultra-supercritical plant in UP and aim to begin supplying reliable and high-quality power by FY30."

The company has announced plans to invest approximately $2 billion (roughly ₹16,800 crore) in establishing the plant and its associated infrastructure. This significant capital commitment underscores Adani Power's confidence in the project's long-term viability and the growing energy demands of Uttar Pradesh.

Economic and Employment Impact

Beyond addressing Uttar Pradesh's energy needs, this major infrastructure project promises substantial economic benefits for the region. According to company projections, the construction phase alone is expected to generate 8,000-9,000 direct and indirect jobs. Once operational, the facility will provide stable employment for approximately 2,000 individuals.

The timing of this power supply agreement aligns with Uttar Pradesh's projected energy requirements. The state's thermal power demand is forecast to increase by 11,000 MW by 2033-34, driven by accelerating industrialization, urbanization, and modernization efforts. This 1,500 MW contract represents a strategic component of the government's comprehensive plan to meet these growing energy needs.

Expanding Portfolio of Power Supply Agreements

This successful bid marks the second major Power Supply Agreement that Adani Power has secured within the past year. In September 2024, the company received a composite 6,600 MW Letter of Intent from the Maharashtra State Electricity Distribution Company Ltd (MSEDCL), comprising 1,600 MW of thermal power and 5,000 MW of solar power. That agreement has since been formalized into a Power Supply Agreement.

As India's largest private sector thermal power producer, Adani Power continues to expand its footprint in the country's energy sector through these strategic contracts. The company's commitment to deploying advanced ultra-supercritical technology for the Uttar Pradesh project also reflects the industry's gradual shift toward more efficient and environmentally responsible power generation methods.

Market Implications

For investors monitoring the power sector, this development signals Adani Power's continued growth trajectory and its ability to secure major long-term contracts in competitive bidding scenarios. The substantial capital investment planned for this project indicates the company's strong financial position and confidence in the long-term demand for thermal power in India's northern regions.

With power generation scheduled to commence by FY30, this project represents a significant addition to Adani Power's future revenue streams and establishes a stronger presence in Uttar Pradesh's energy market.

Disclaimer: The views and investment tips expressed in this article are for informational purposes only and do not represent financial advice. The views expressed are those of the sources cited and not necessarily those of this website or its management. Investing in equities or other financial instruments carries the risk of financial loss. Readers must exercise due caution and conduct their own research before making any investment decisions. We are not liable for any losses incurred as a result of decisions made based on this article. Please consult a qualified financial advisor before making any investment.

Tata Steel Q4 Results: Net Profit Surges 113% to ₹1,301 Crore; ₹3.60 Dividend Announced

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Tata Steel Q4 Results: Net Profit Surges 113% to ₹1,301 Crore; ₹3.60 Dividend Announced

Strong Performance in Q4FY25 Despite Revenue Dip; Company Reports Annual Profit After Previous Year's Loss

Tata Steel, one of India's leading steel manufacturers, has posted impressive financial results for the fourth quarter of fiscal year 2025, with its consolidated net profit more than doubling compared to the same period last year. The company has also announced a dividend payout for shareholders, signaling confidence in its financial stability and future outlook.

Q4 Financial Performance Highlights

For the quarter ending March 31, 2025 (Q4FY25), Tata Steel reported a consolidated net profit of ₹1,300.81 crore, representing a substantial 113% increase from ₹611.48 crore in the corresponding quarter of the previous year (Q4FY24). The performance is even more remarkable on a sequential basis, with profits surging nearly four-fold from ₹326.64 crore in Q3FY25.

However, the company's consolidated revenue from operations showed a slight decline, standing at ₹56,218.11 crore in Q4FY25, down 4.2% year-on-year from ₹58,687.31 crore in Q4FY24. On a quarter-on-quarter basis, the revenue increased by 4.8% from ₹53,648.30 crore in Q3FY25, indicating improving business momentum in the final quarter of the fiscal year.

Annual Performance Turnaround

The full fiscal year results demonstrate a significant turnaround for Tata Steel. For FY25, the company reported a consolidated net profit of ₹3,173.78 crore, a remarkable recovery from the net loss of ₹4,909.61 crore recorded in FY24. This positive shift reflects the company's successful strategic initiatives and operational improvements implemented throughout the year.

Annual revenue from operations stood at ₹2,18,542.5 crore, representing a 4.6% decrease from ₹2,29,170.78 crore in FY24. Despite this slight revenue decline, the company's ability to turn a substantial profit demonstrates improved operational efficiency and cost management.

Record-Breaking Operational Performance

Commenting on the results, TV Narendran, CEO & MD of Tata Steel, highlighted that FY2025 has been "an important transition year" for the company with significant developments across operating geographies. He noted that India deliveries reached an all-time high of approximately 21 million tons, marking a 5% year-on-year increase. This growth was supported by the smooth ramp-up of the new blast furnace at Kalinganagar and capacity utilization close to 100% at other operations.

Narendran also emphasized Tata Steel's continued dominance in specialized segments: "At the segment level, Tata Steel continues to be the preferred supplier for automotive steel, with high share of business in new model launches. Tata Tiscon achieved 'best ever' volumes and grew by 19% year-on-year to around 2.4 million tons."

Dividend Announcement

In a move that will benefit shareholders, Tata Steel's board of directors has recommended a dividend of ₹3.60 per share for the financial year 2024-25. This dividend is subject to approval by shareholders at the upcoming Annual General Meeting (AGM) scheduled for Wednesday, July 2, 2025.

Market Response

Investor sentiment toward Tata Steel was already positive ahead of the results announcement. The company's shares closed up 6.16% at ₹151.55 per share on Monday, May 12, 2025, indicating strong market confidence in the company's performance prospects.

Future Outlook

With its successful transition through FY25, record-breaking operational performance in India, and return to profitability on an annual basis, Tata Steel appears well-positioned for continued growth. The company's strong market position in specialized segments like automotive steel and construction products (Tata Tiscon) provides a solid foundation for future performance.

The dividend declaration further underscores management's confidence in the company's financial health and future prospects, potentially making it an attractive consideration for income-focused investors in the steel sector.

Disclaimer: The views and investment tips expressed in this article are for informational purposes only and do not represent financial advice. The views expressed are those of the sources cited and not necessarily those of this website or its management. Investing in equities or other financial instruments carries the risk of financial loss. Readers must exercise due caution and conduct their own research before making any investment decisions. We are not liable for any losses incurred as a result of decisions made based on this article. Please consult a qualified financial advisor before making any investment.