ADANIENSOL - Adani Energy Solutions Limited Share Price

In the earnings call for Q2 & H1 FY26, management provided a positive outlook focused on growth in both the transmission and smart metering segments. The order pipeline for transmission projects stands at approximately INR 60,000 crores. Total projected revenues for the fiscal year exceed INR 27,000 crores, with a capital expenditure (capex) of INR 14,000 crores allocated to smart metering, which is expected to generate substantial returns.

Management anticipates a significant uptick in EBITDA in the second half, with three major transmission projects slated for commissioning, collectively valued at over INR 12,000 crores. This is expected to lead to an annual run-rate EBITDA increase of about INR 2,800 crores. To bolster smart metering efforts, a total of 42.5 lakh meters were installed in the first half, with a goal of surpassing one crore installations by year-end.

The total capex for the fiscal year is projected to reach between INR 17,000 and INR 18,000 crores. For the distribution segment, an annual capex of about INR 1,600 to INR 1,800 crores is planned. The management also noted exceptional items impacting financial comparisons, including a prior year's contribution of INR 92 crores from the Dahanu plant and a deferred tax reversal of INR 314 crores not present in the current year.

In summary, management expressed confidence in achieving significant operational milestones and revenue growth, driven by strong order books and strategic capex investments.

1. Question: "Does the INR 96,000 crores figure in the transmission pipeline include both the HVDC Khavda-Olpad and South Kalamb?"
Answer: It excludes Khavda-Olpad but includes South Kalamb. We are awaiting a response from the PFC regarding Olpad, which has been delayed due to holidays, but we anticipate a response this week.

2. Question: "What is the update on the Tamil Nadu smart meter bid?"
Answer: The Tamil Nadu bid submission is concluded; technical evaluations are ongoing. Other bids from Telangana and Karnataka must get RDSS approval, which they have submitted for, so we expect bidding to proceed once approved.

3. Question: "Are there any constraints regarding the commissioning of HVDC projects?"
Answer: We face right-of-way challenges and skilled manpower shortages. To address this, we engage directly with landowners while also training 1,200 workers for transmission line erection, which will ease these constraints.

4. Question: "Could you elaborate on parallel licensing opportunities beyond Mumbai?"
Answer: We applied for parallel licenses in Navi Mumbai and Mundra, with formalities nearly complete. The competition is minimal in Mundra, while others are still in early stages in Navi Mumbai, suggesting good potential in those areas.

5. Question: "What is the expected bidding pipeline for the second half of the year?"
Answer: While I can't provide an exact figure, there is a potential INR 90,000 crores in the next 1-1.5 years, including state-level projects. We aim for around 25% market share in this bidding pipeline.

6. Question: "What is the capex plan for AEML during the second half?"
Answer: AEML is expected to incur about INR 1,000 crores in capex in the second half of the year, part of a total INR 1,600 crores for the full year.

7. Question: "What would the expected EBITDA run rate be from the planned capex this year?"
Answer: We anticipate capitalizing approximately INR 17,000-18,000 crores, resulting in an EBITDA run rate of around INR 2,800 crores annually, primarily driven by newly initiated transmission projects.

8. Question: "What is the status of the Bhadla-Fatehpur HVDC project?"
Answer: We have received the SPV LOI for Bhadla-Fatehpur, contracts are finalized, and construction has started. Transmission line works will commence shortly, indicating positive progress on this project.