Amid rising energy demand, Gautam Adani’s group and ABB Power report increase in net profit

Amid rising energy demand, Gautam Adani’s group and ABB Power report increase in net profit

Increasing power demand, coupled with the government’s efforts in achieving self-reliance in coal production, leads to the growth of Indian power businesses like Gautam Adani-led Adani Power and ABB Power Products and Systems India Ltd

A recentgovernment data showed that coal’s share in India’s electricity generation has been increasing in the last two years. However, it reached its peak in the quarter ending March 2021. This can predominantly be attributed to the increasing power demand that surgedby around 25 per centin the first week of May, coupled with the government’s continued  push in indigenous coal production. All these have, in some ways, resulted in the growth of Indian power businesses as well that are dependent on coal.

Adani Power led by Gautam Adani,for one,has witnessed an increase in its consolidated net profit of over Rs 13.13 crore in Q4 FY21. Its total revenue and EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization) for Q4 FY21 also stood higher than that ofQ4 FY20. Reason? Favourable currency movement and lower cost of domestic alternate coal among others.

ABB Power Products and Systems India is another company that reported a jump in its net profit – to around Rs 39.44 crore for the quarter ended March 2021 from Rs 29.18 crore in the same quarter last year.Several businesses across the world have been severely impacted by the pandemic. However, for ABB, “no material adjustments have been required at this stage”, for liquidity.

While theseachievements are undoubtedly commendable, the detrimental impact of coal that many of such power businesses are still dependent on, is undeniable. In this light, many companies are stepping up in their efforts to adopt a sustainable approach and slowly make way for clean energy transition.

For instance, billionaire Gautam Adani’s Group has been working towards increasing the share of clean energy in the Indian power mix through projects like Adani Solar Energy Chitrakoot One Limited (ASECOL) and Adani Green Energy. However, with India’s power consumption currently shooting through the roof especially amid covid-19 restrictions, the power businesses are temporarily tapping the potential of coal to fulfil this urgent demand.

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