Adani Energy Solutions (ADANIENSOL) Q2 23/24 earnings summary

Executive summary

• Consolidated revenue for Q2 FY24 rose 13% YoY to Rs 3,421 Cr, with operational EBITDA up 10% to Rs 1,368 Cr and PAT up 46% to Rs 284 Cr, driven by higher energy demand and operational efficiency.

• Board approved unaudited standalone and consolidated results for Q2 and H1 FY24, reflecting continued expansion including acquisition of KPS1 Transmission Limited and ongoing regulatory matters.

• Transmission network expanded by 219 ckm to 19,862 ckm; system availability remained robust at 99.68%.

• Distribution loss improved to 5.81% in Q2 FY24; renewable power share in Mumbai circle increased to 38%.

• Secured major smart metering contracts totaling 14.76 million meters valued at Rs 174 billion; received LOA for four smart metering projects in Maharashtra, AP, and Bihar.

Financial highlights

• Q2 FY24 revenue up 13% YoY to Rs 3,421 Cr; operational EBITDA up 10% to Rs 1,368 Cr; PAT up 46% to Rs 284 Cr; H1 FY24 revenue up 16% YoY to Rs 7,042 Cr; EBITDA up 5% to Rs 2,821 Cr; PAT up 28% to Rs 466 Cr.

• Consolidated revenue from operations for H1 FY24 was ₹7,160.90 crore, net profit after tax ₹466.07 crore; standalone net profit for H1 FY24 was ₹406.24 crore.

• Cash profit for Q2 FY24 at Rs 757 Cr, up 1% YoY; for H1 FY24 at Rs 1,406 Cr, down 5% YoY due to one-time tax and hedging costs.

• Consolidated EBITDA margin for H1 FY24 was 35.70%, slightly lower than 38.30% in H1 FY23; basic EPS (consolidated) for H1 FY24 was ₹4.04.

• Net debt to EBITDA improved to 3.8x as of September 2023; consolidated debt-equity ratio stable at 2.78x; interest service coverage ratio improved to 1.58x.

Outlook and guidance

• Under-construction pipeline of Rs 150 bn in Transmission and Rs 230 bn in Smart Metering positions AESL for future growth; annual capex plan of Rs 50-60 bn, with Rs 13-15 bn allocated to grow RAB at AEML.

• Targeting 60% renewable power procurement by FY27 (achieved 38% as of September 2023); commitment to become Net Zero by 2050; focus on expanding into new geographies and smart metering.

• Transaction for Essar Power Transmission Company Limited (EPTCL) expected to close by March 2024, pending regulatory approvals.

• Management continues to monitor regulatory investigations and legal proceedings, with no adjustments made to financials pending outcomes.