Supply Chain Management

End-Term Project Report

Supply Chain Analysis of Adani Power

Submitted by:

Kedar Majethiya MBA24124

INDEX
Sr. No. Particulars Page No.

1 Understanding supply chain

2 Competitive & Supply Chain Strategy

3 Strategic Fit

4 Supply Chain Drivers & Metrics

5 Forecasting

6 Distribution Design & Network Design

7 Procurement/Outsourcing Strategy

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Understanding the Supply Chain of Adani Power

Push Process

Procurement & Transportation & Storage & Inventory

Vendor Selection Logistics Management

Distribution
Electricity
Plant Operations /Transmission of
Generation
Power

Pull Process

The Supply chain process of Adani power is Push based from fuel management side where they anticipate
the demand of raw materials and procure fuel by making long term as well as short term contracts with
suppliers and manage the inventory and storage of these materials.
The second most important part is the pull process in which the plant operations are responding to the
grid requirements i.e. the real time demand of the customers as power required no transportation time and
can travel across kilometers in split of seconds, and hence balances operations by utilizing only the
resources required to produce the amount of power required at that point of time

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4
Competitive & Supply Chain Strategy

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Strategic Fit
The company's competitive and supply chain strategy is built on operational excellence, logistics
integration, and strategic investments. Through in-house capabilities, stakeholder engagement, and
continuous improvement, it ensures revenue stability, cost efficiency, and market leadership in the energy
sector while fostering sustainable business practices and future growth opportunities.

1. Understanding the customer and supply chain uncertainty:

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2. Understanding Supply chain Capabilities:

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3. Achieving Strategic fit:

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Supply Chain Drivers & Metrics

1. Profitability Analysis

Metric Adani Power Adani Green JSW Energy

Return on Assets (ROA) 22.56% 1.42% 4.34%

Return on Equity (ROE) 48.28% 7.22% 10.68%

Profit Margin (PM) 34.55% 12.04% 5.95%

Adani Power Outperforms:

 Higher ROA, ROE, and profit margin indicate superior profitability.
 Probable Reasons:
o Lower fuel costs because of operational efficiency and scale

o Strong demand for thermal power because of long-term PPAs (Power Purchase
Agreements)
o Better tariff realization driving higher margins

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Adani Green Underperforms:
 Very low ROA (1.42%) and ROE (7.22%) suggest poor returns despite rapid growth
 Probable Reasons:
o Higher capital investment in renewable infrastructure increases asset base but delays
profitability
o Longer gestation periods for renewable projects to achieve break-even

JSW Energy Moderate Performance:

 ROA and ROE are better than Adani Green but much lower than Adani Power.
 Probable Reasons:
o Diversified portfolio (thermal, hydro, and renewables) balances risks but limits profit
margins.
o Higher dependence on market-driven tariffs rather than PPAs, leading to lower
profitability.
2. Efficiency & Asset Utilization Analysis

Metric Adani Power Adani Green JSW Energy

Asset Turnover (AT) 0.65 0.12 0.73

Receivable Turnover (ART) 5.16 7.79 17.91

Inventory Turnover (INVT) -6.92 -4.08 1.92

JSW Energy Leads in Efficiency:

 Best Asset Turnover Ratio (0.73) and Receivables Turnover (17.91) indicate stronger revenue
generation and credit control.
 Probable Reasons:
o Effective power sales strategy, ensuring quick receivable collections.

o Higher private-sector sales (B2B) reduce dependency on slow-moving government

contracts.
Adani Green Scores High on Receivable Turnover:
 ART (7.79) is better than Adani Power, meaning faster cash collection from customers.
 Probable Reasons:
o Renewable energy companies usually have better payment security via government-
backed PPAs.

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Adani Power & Adani Green Struggle with Asset Utilization:
 Low Asset Turnover (0.65 & 0.12) indicates that revenue generation is not optimal per unit
asset.
 Probable Reasons:
o Capital-intensive nature of thermal and renewable power projects.

o High fixed assets but slow revenue growth in Adani Green due to early-stage projects.

3. Working Capital & Cash Cycle Analysis

Metric Adani Power Adani Green JSW Energy

Cash-to-Cash Cycle (C2C) - Weeks 64.26 66.20 149.63

Days Inventory Outstanding (DIO) -52.72 -89.48 190.81

Days Sales Outstanding (DSO) 70.71 46.83 20.38

Days Payables Outstanding (DPO) -46.29 -108.85 61.55

Adani Power & Adani Green Manage Working Capital Better than JSW:
 Adani Green has an aggressive payables cycle (-108.85 DPO), delaying payments
strategically.
 JSW Energy struggles the most with a long C2C cycle (149.63 weeks), indicating slow cash
conversion.
 Probable Reasons:
o Adani Power: Strong payment collection strategy helps improve cash flow.

o Adani Green: Takes advantage of supplier credit terms but is vulnerable to delayed
collections.
o JSW Energy: Longer DSO (20.38) means quicker collection, but high DIO (190.81)
impacts cash flow.

4. Key Takeaways & Future Outlook

Company Strengths Challenges

Adani Highest profitability, better working capital

Lower efficiency in asset utilization.
Power management.

Adani Green Strong receivable turnover, improving working Lower returns due to high capital

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Company Strengths Challenges

capital cycle. investments.

Best efficiency in asset turnover, fast receivable Poor cash-to-cash cycle, slow inventory
JSW Energy
collection. turnover.

Strategic Recommendations:
1. Adani Power: Focus on improving asset turnover by maximizing capacity utilization.
2. Adani Green: Reduce reliance on external funding and improve profitability in upcoming
projects.
3. JSW Energy: Work on reducing the cash conversion cycle to maintain liquidity.

Forecasting

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Forecasting using linear trend model:
LINEAR TREND MODEL
SALES Adani Power (SALES) FORECAST ERROR ABSOLUTE ERROR
1 Q2 2023 70,437.7 88255.875 -25.30% 25.30%
2 Q3 2023 77,644.1 95121.01333 -22.51% 22.51%
3 Q4 2023 102,420.6 101986.1517 0.42% 0.42%
4 Q1 2024 110,055.4 108851.29 1.09% 1.09%
5 Q2 2024 129,905.8 115716.4283 10.92% 10.92%
6 Q3 2024 129,914.4 122581.5667 5.64% 5.64%
7 Q4 2024 133,636.9 129446.705 3.14% 3.14%
8 Q1 2025 149,556.3 136311.8433 8.86% 8.86%
9 Q2 2025 133,388.8 143176.9817 -7.34% 7.34%
10 Q3 2025 136,711.8 150042.12 -9.75% 9.75%
11 Q4 2025 Est(REGRESSION) 156907.2583
12 Q1 2026 Est(REGRESSION) 163772.3967
MAPE 9.50%

Linear Trend Model

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Forecasting using Winter Holts model:
WINTER'S HOLT MODEL
SALES Adani Power (SALES) DEASONALIZED DEMAND DEASONLIZED SALES SEASONAL FACTOR ESTIMATE FORECAST ERROR ABS. ERROR %ERROR
1 Q2 2023 70,437.7 83809.95 0.84 0.95611316 80131.7915 -9,694.09 9694.09148 13.76%
2 Q3 2023 77,644.1 91901.40 0.84 1.009294 92755.5313 -15,111.43 15111.4313 19.46%
3 Q4 2023 102,420.6 90139.45 99992.86 1.02 0.98923755 98916.6865 3,503.91 3503.91352 3.42%
4 Q1 2024 110,055.4 105006.475 108084.31 1.02 0.96690324 104507.07 5,548.33 5548.33015 5.04%
5 Q2 2024 129,905.8 118074.05 116175.77 1.12 1.02308492 118857.674 11,048.13 11048.1262 8.50%
6 Q3 2024 129,914.4 125878.125 124267.22 1.05 1.01615472 126274.722 3,639.68 3639.67799 2.80%
7 Q4 2024 133,636.9 135753.35 132358.68 1.01 0.97518084 129073.643 4,563.26 4563.25665 3.41%
8 Q1 2025 149,556.3 136624.1 140450.13 1.06 1.01621438 142727.442 6,828.86 6828.85808 4.57%
9 Q2 2025 133,388.8 148541.59 0.90 1.02308492 151970.656 -18,581.86 18581.8563 13.93%
10 Q3 2025 136,711.8 156633.04 0.87 1.01615472 159163.403 -22,451.60 22451.6027 16.42%
11 Q4 2025 Est(REGRESSION) 164724.50 0.97518084 160636.171
12 Q1 2026 Est(REGRESSION) 172815.95 1.01621438 175618.054

MAPE 9.13%

Winter's Model
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1. Forecast Comparison
 Linear Trend Model:
o Projects future sales based purely on a linear regression trend

o Forecasts Q4 2025 sales at 156,907.2583 and Q1 2026 sales at 163,772.3967

o The model has an absolute percentage error (APE) of 9.50%

 Winter’s Holt Model:

o Incorporates seasonality and trend components, making it more adaptable to
fluctuating demand
o Absolute percentage error is slightly lower at 9.13%, indicating better predictive
accuracy

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2. Variance in Forecasts
 The Winter’s Holt Model adjusts for seasonality, meaning it better captures cyclical variations
in sales rather than assuming a simple upward trend
 The Linear Trend Model assumes a steady growth trajectory, which may not always align with
actual business cycles
3. Implications
 Given that Adani Power operates in the energy sector, sales are likely influenced by seasonal
demand patterns, regulatory changes, and economic factors
 The Winter’s Holt Model provides a more refined forecast by accounting for these fluctuations,
leading to slightly improved accuracy
Despite the low variance in error percentage (0.37%), Winter’s Holt Model is the preferred choice
for forecasting due to its ability to capture seasonal effects

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Distribution Design & Network Design

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Adani Power Ltd (ADANI IN Equity) - Supply Chain Analysis (Suppliers)
Ticker Company Name Cost Category %Cost Category %Supplier Rev Relationship Value (Q) (Mln) (USD) Relationship Year Relationship Period Source As Of Date
ADSEZ IN Equity Adani Ports & Special Economic Zone Ltd COGS 1.77 % 2.40 % 19.3535 2024 A 2024A CF (ADANI IN) 30-06-2024
ADE IN Equity Adani Enterprises Ltd COGS 1.41 % 0.53 % 15.4266 2024 A 2024A CF (ADANI IN) 30-06-2024
PSL IN Equity Pennar Industries Ltd COGS 0.04 % 0.47 % 0.4624 2024 Q2 Estimate (PSL IN) 29-01-2024
GLIN IN Equity Goodluck India Ltd COGS 0.02 % 0.23 % 0.2719 2025 Q2 Estimate (GLIN IN) 10-12-2024
EXID IN Equity Exide Industries Ltd COGS 0.06 % 0.13 % 0.6445 2025 Q1 Estimate (EXID IN) 19-09-2024
ACC IN Equity ACC Ltd COGS 0.01 % 0.02 % 0.1326 2024 A 2024A CF (ACC IN) 15-08-2024
ACEM IN Equity Ambuja Cements Ltd COGS 0.02 % 0.02 % 0.2115 2024 A 2024A CF (ACEM IN) 01-05-2024
1831450D IN Equity Adani Infrastructure Management Services Ltd COGS 1.63 % #N/A N/A 17.7255 2024 A 2024A CF (ADANI IN) 30-06-2024
Source: Bloomberg
Suppliers ranked by % of revenue generated from center company.
Only quantified relationships are included.

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Supplier Data:
Ticker Company Name Cost Category %Cost Category %Supplier Rev Relationship Value (Q) (Mln) (USD) Relationship Year Relationship Period Source As Of Date
ADSEZ IN Equity Adani Ports & Special Economic Zone Ltd COGS 1.77 % 2.40 % 19.3535 2024 A 2024A CF (ADANI IN) 30-06-2024
ADE IN Equity Adani Enterprises Ltd COGS 1.41 % 0.53 % 15.4266 2024 A 2024A CF (ADANI IN) 30-06-2024
PSL IN Equity Pennar Industries Ltd COGS 0.04 % 0.47 % 0.4624 2024 Q2 Estimate (PSL IN) 29-01-2024
GLIN IN Equity Goodluck India Ltd COGS 0.02 % 0.23 % 0.2719 2025 Q2 Estimate (GLIN IN) 10-12-2024
EXID IN Equity Exide Industries Ltd COGS 0.06 % 0.13 % 0.6445 2025 Q1 Estimate (EXID IN) 19-09-2024
ACC IN Equity ACC Ltd COGS 0.01 % 0.02 % 0.1326 2024 A 2024A CF (ACC IN) 15-08-2024
ACEM IN Equity Ambuja Cements Ltd COGS 0.02 % 0.02 % 0.2115 2024 A 2024A CF (ACEM IN) 01-05-2024
1831450D IN Equity Adani Infrastructure Management Services Ltd COGS 1.63 % #N/A N/A 17.7255 2024 A 2024A CF (ADANI IN) 30-06-2024

Customer Data:
Ticker Company Name %Company Rev Cost Category %Customer Cost Category Relationship Value (Q) (Mln) (USD) Relationship Year Relationship Period Source As Of Date
ADE IN Equity Adani Enterprises Ltd 22.54 % COGS 12.88 % 342.7974 2024 A 2024A CF (ADANI IN) 30-06-2024
ACEM IN Equity Ambuja Cements Ltd 0.01 % COGS 0.02 % 0.1985 2024 A 2024A CF (ACEM IN) 01-05-2024
ADANIENS IN Equity Adani Energy Solutions Ltd 0.01 % COGS 0.05 % 0.1942 2024 A 2024A CF (ADANI IN) 30-06-2024
ACC IN Equity ACC Ltd 0.01 % COGS 0.03 % 0.148 2024 A 2024A CF (ACC IN) 15-08-2024
SNGI IN Equity Sanghi Industries Ltd 0.00 % COGS 0.00 % 0.0012 2024 A 2024A CF (SNGI IN) 29-05-2024
1831450D IN Equity Adani Infrastructure Management Services Ltd #N/A N/A #N/A N/A #N/A N/A #N/A N/A 2023 A 2023A CF (ADANI IN) 27-06-2023
SRSN IJ Equity Indo Acidatama Tbk PT #N/A N/A #N/A N/A #N/A N/A #N/A N/A 2021 C3 2021C3 CF (SRSN IJ) 15-11-2021

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Customer Geographic Exposure Analysis:

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1. Supplier Distribution

Key Observations:

o India dominates the supply chain, ensuring better control and cost efficiency

o A small percentage of suppliers are domiciled outside India, likely to mitigate risks and
access specialized resources

o The presence of international suppliers indicates reliance on imported raw materials,

albeit to a limited extent

Probable Reasons for Distribution:

 Cost advantages in domestic procurement

 Government policies favoring domestic sourcing in the energy sector

 Strategic risk management, sourcing a fraction of raw materials from international markets to
reduce dependency on a single geography

2. Customer and Partner Network

The customer network visualization reveals that Adani Power has significant exposure to both upstream
suppliers and downstream customers, which include:

 Major industrial clients such as ACC Ltd. and Adani Enterprises Ltd

 A diversified customer base within India, reflecting strong demand for power

Key Insights:

 The customer base is largely concentrated within the Adani Group and affiliated industries,
suggesting strong intra-group synergies

 The limited customer diversification may pose a revenue concentration risk if one major client
reduces its energy demand

Strategic Considerations:

 The company leverages internal synergies within the Adani Group, reducing customer
acquisition costs

 Potential need to expand customer base beyond existing clients to mitigate revenue
dependency risks

3. Commodity Exposure and Price Trends

Adani Power's supply chain is highly dependent on key raw materials, with price fluctuations impacting
procurement costs. The commodity exposure analysis highlights:

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  Aluminum alloy prices increased by 8.54%, impacting infrastructure costs

 Coal prices dropped by 13.26%, which could reduce power generation costs and improve
margins.

 Diesel and steel prices saw minor declines, reducing operational and maintenance expenses

Implications of Commodity Price Trends:

 Lower coal prices benefit power producers, reducing production costs

 Aluminum price hikes may increase capital expenditures for infrastructure upgrades

 Volatility in commodity markets requires strategic sourcing and hedging strategies to stabilize
costs

4. Supply Chain Strategy Analysis

Decision Phases

 Strategic: Long-term supplier relationships and energy market positioning

 Tactical: Inventory and cost management, procurement planning

 Operational: Day-to-day supplier coordination and risk mitigation

Strategic Fit and Approach

 Efficiency-Focused Strategy: The company prioritizes cost control, stable supply chain
operations, and bulk procurement strategies to achieve economies of scale

 Push-Based Model: Power generation is largely forecast-driven, based on anticipated demand

rather than real-time customer pull

 Moderate Responsiveness: The company adjusts procurement strategies based on commodity

price movements but largely follows a fixed supply structure

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Procurement/Outsourcing Strategy

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