Adani Energy Solutions LtdQ1 FY26
Adani Energy Solutions Ltd Q1 FY26 Earnings Call Analysis
Revenue, margin, capex, fundraise and order book outlook from management commentary.
Price: ₹1,539P/E: 70.6Market Cap: ₹1.6L CrSector: Power
Management growth scorecard
Revenue
Category 2
Margin
Category 3
Fundraise
Yes
Order
Yes
Capex
Yes
3 of 5 growth signals are positive.
Full analysisRevenue guidance
Category 2- →Transmission EBITDA is expected to triple in 3 to 4 years, driven by the completion of INR72,000 crores under-construction projects, adding about INR10,000 crores in tariff revenue (Pages 13-14).
- →Operating profit is projected to grow from around INR8,000 crores in FY26 to approximately INR11,500 crores next year due to capitalization of ongoing projects (Page 14).
- →Capex guidance indicates INR22,000 crores in FY27 and around INR23,000 crores in FY28, supporting growth primarily in transmission with INR15,500 - 20,000 crores yearly spending (Page 5).
- →Smart meter installations are growing rapidly, with 82.29 lakh installed in FY26 and 1 crore expected in FY27, driving smart meter EBITDA growth (Pages 11-12).
- →C&I segment, with 5,000 MW renewable capacity contracted, is becoming a significant growth driver alongside transmission, distribution, and smart metering (Page 5).
- →Borrowing expected to be managed to maintain net leverage between 4.5x to 4.7x despite growth phase (Page 18).
Margin guidance
Category 3- →Operating profit (FY26): ~INR8,000 crores, expected to more than double in 3-4 years.
- →Transmission EBITDA expected to triple in next 36-40 months as current projects complete.
- →Next-year operating profit (FY27) projected around INR11,500 crores driven by capitalization.
- →Smart meter business EBITDA expected to generate INR2,400 to 3,000 crores once fully ramped.
- →Distribution business EBITDA currently ~INR2,500 crores, expected to grow to ~INR3,000+ crores.
- →Capex planned at INR22,000 crores for FY27 and up to INR23,000-25,000 crores for FY28 to support growth.
- →Management maintains leverage ratio target of 4.5x to 4.7x despite high capex.
- →Earnings growth driven largely by transmission project capitalization, smart metering scale-up, and new C&I segment opportunities.
- →Overall, earnings and operating profit are poised for strong, sustained growth with disciplined financial management.
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Fundraise plans
Yes- →The company expects borrowings to increase in line with capex and growth but will maintain a net leverage ratio around 4.5x to 4.7x, ensuring financial discipline.
- →Capex locked in at INR 77,000 crores over the next 4 years will guide borrowing plans.
- →Borrowing levels could rise to INR 125,000 crores to INR 150,000 crores during high growth phases, but management is confident they will not exceed targeted leverage.
- →The company has successfully refinanced a $500 million bond with a U.S. insurance investor, indicating ongoing debt management and access to funding.
- →Equity portion of capex will likely be funded through internal accruals; debt will finance approximately 70% of projects.
- →No explicit mention of new equity fundraising in the transcript, focus primarily on managing and increasing debt prudently.
Order book
Yes- →Smart Metering:
- → - Current concession reached 2.46 crore meters (from initial 2.3 crore).
- → - Pending market includes states like Tamil Nadu, Karnataka, Telangana, Andhra Pradesh, Gujarat, and MP.
- → - Expect to install around 1 crore smart meters in FY27.
- →Transmission:
- → - Tender pipeline: INR 1.5 trillion (~INR 1.5 lakh crores) overall.
- → - 12-month tender pipeline: INR 80,000 to 1 lakh crores.
- → - Market share expected to be maintained between 25% to 30%.
- →Capex pipeline:
- → - FY27 Capex expected INR 21,000-22,000 crores (Transmission INR 15,500 cr, Distribution INR 2,350 cr, Smart metering INR 3,900 cr).
- → - FY28 Capex estimated around INR 22,000-25,000 crores (Transmission ~INR 20,000 cr, Distribution ~INR 2,000 cr, Smart metering ~INR 1,500 cr).
- →Commercial & Industrial (C&I):
- → - 5,000 MW renewable capacity contracted.
- → - Dozens of third-party consumers aggregating ~1,400 MW capacity.
Capex plans
Yes- →Capex guidance for FY27 is around INR 22,000 crores:
- → - Transmission: ~INR 15,500 crores
- → - Distribution: ~INR 2,350 crores
- → - Smart metering: ~INR 3,900 crores
- →FY28 estimated capex is approximately INR 23,000 crores:
- → - Transmission: ~INR 20,000 crores
- → - Distribution: ~INR 2,000 crores
- → - Smart metering: ~INR 1,500 crores (based on existing order book)
- →Capex includes significant projects like Fatehpur-Bhadla (main capex in FY27-FY28) and Mumbai HVDC (commissioned FY26).
- →INR 77,000 crores of capex is already locked in over the next 4 years.
- →Focus on improving capex deployment capability while maintaining strong credit ratings (AAA/AAA+).
- →Expect continued investments in transmission, distribution, smart metering, and C&I businesses, with strategic intent to capture growing market opportunities and maintain growth momentum.
How does Adani Energy Solutions Ltd rank vs peers in Power?
Pro feature1Adani Energy Solutions Ltd
Rev 2Mar 3
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