Summary
Adani Energy Solutions Limited - Q3 FY26 Earnings Call Summary Friday, January 23, 2026
Event Participants
Executives Bhaskar Sarkar (Business Head – Cooling Solutions), Kandarp Patel (CEO), Kapil Sharma (Business Head – Transmission), Kunjal Mehta (CFO), Pushpendrasinh Zala (Business Head – Smart Metering), Vijil Jain (Head IR)
Analysts Anuj Upadhyay (Investec), Chun Yi (Ispring), Gaurav Nigam (Tunga Investments), Manish Somaiya (Cantor), Mohit Kumar (ICICI Securities), Prateek Dugar (Intelsense), Pratik Chitaleya (M&G), Puneet Gulati (HSBC), Shirom Kapur (Jefferies), Sumit Kishore (Axis Capital), Vishal Biraia (Bandhan Mutual Fund), Vishal Periwal (PL Capital)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Total Income | ₹4,800 crores (approx) | +16% YoY growth, driven by commissioning of new transmission lines and smart meter ramp-up. |
| Consolidated EBITDA | ₹2,200 crores | +21% YoY; growth supported by high line availability and new project operationalization. |
| Consolidated PBT | ₹800 crores | +43% YoY; adjusted PAT grew 30% after accounting for a ₹185 crore deferred tax effect in the prior year. |
| Net Debt | ₹38,000 crores | Net debt-to-EBITDA at 4.3x; management guides for a 4.0x–4.5x range through the capex cycle. |
| Gross Debt | ₹48,000 crores | Includes ₹25,000 crores in USD bonds; cash balance stands at ₹9,600 crores. |
| Transmission Pipeline | ~₹78,000 crores | Total project visibility including the newly won Khavda South Olpad HVDC project. |
| Smart Meter Installations | 92 lakh units | Cumulative installations; company expects to cross 1 crore (10 million) meters by FY26 end. |
| T&D Losses (AEML) | 4.03% | Continuous improvement in distribution efficiency; collection efficiency remains above 100%. |
Geographic & Segment Commentary
- Transmission: Commissioned four projects in 9M FY26 (NKTL, Khavda Phase-II, Khavda Pooling, Sangod). Management expects massive capitalization of ~₹25,000 crores over the next 15 months as seven major projects (including Mumbai HVDC) operationalize.
- Smart Metering: Currently installing 22,000–25,000 meters daily. The segment is shifting toward a self-funding model via the securitization of receivables, reducing reliance on transmission cash flows.
- Distribution (AEML): Sales growth was muted due to weather conditions, but operational metrics remain strong. The segment generates healthy surplus cash, which is being prioritized for bond buybacks and de-leveraging.
- C&I & Cooling: Rapidly scaling with an aggregate load of 1,300 MW across 31 consumers as of January 2026. India’s largest district cooling facility (40,000 TR) is under construction at Mundra.
Company-Specific & Strategic Commentary
- HVDC Leadership: AESL won the Khavda South Olpad project (NCT cost ~₹12,000 Cr, actual cost ~₹19,000 Cr). Management noted that HVDC remains a core moat, with technical capabilities allowing for aggressive execution timelines.
- Capital Management: Secured rating upgrades from Moody’s (Negative to Stable) for key subsidiaries. The company executed $95 million in bond buybacks in FY26 to date and plans to refinance $500 million maturing in August 2027 within the next few months.
- Execution De-risking: Established a specialized training facility at Gorda to supply 400–500 skilled workers per quarter to EPC partners, addressing industry-wide manpower shortages.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Capitalization | ~₹25,000 crores by Q4 FY27 | Driven by Mumbai HVDC, Khavda Phase III-A, WRSR, Jamnagar, and Navinal projects. |
| Annual Capex | ₹18,000–20,000 crores | Steady-state annual transmission capex projected for the next 5 years. |
| Tendering Opportunity | ₹80,000–100,000 crores | Expected industry-wide bidding pipeline over the next 12–15 months across ISTS and State levels. |
| Smart Meter Goal | ~5 crore meters (long-term) | Management aims to maintain market share as new states (Karnataka, Telangana) open bidding. |
Risks & Constraints
| Risk | Context |
|---|---|
| Execution Delays | Prolonged monsoon in Maharashtra and Gujarat delayed Mumbai HVDC and Jamnagar projects by 1–2 months. |
| Right of Way (ROW) | Land acquisition for Fatehpur and substation land for Jamnagar remain active challenges requiring government intervention. |
| Supply Chain | While no current impact, restrictions on Chinese equipment remain a watch-point; AESL relies on strategic OEM ties (e.g., GE) to mitigate this. |
Q&A Highlights
Transmission Tendering & Market Share
- Question: What is the outlook for transmission bidding given the recent slowdown? (Mohit Kumar)
- Answer: While bidding slowed recently due to generation re-evaluations, we see a ₹1 lakh crore opportunity pipeline. We maintained a 30-32% market share this year, winning ₹13,600 crores in projects (NCT cost). (Kandarp Patel/Vijil Jain)
Mumbai HVDC Timelines
- Question: What caused the delay in the Mumbai HVDC project? (Mohit Kumar)
- Answer: Delays were caused by prolonged rains in Mumbai affecting underground cabling in Aarey Colony and technical challenges at the Vasai Creek crossing. The project is now 30-45 days from commissioning. (Kandarp Patel)
Funding & Equity Dilution
- Question: Will the company need to raise equity to fund the ₹78,000 crore pipeline? (Pratik Chitaleya)
- Answer: No equity dilution is envisaged. Capex will be funded through internal accruals, asset-level 70-75% leverage, and securitizing smart meter receivables. (Kunjal Mehta)
C&I & Data Center Strategy
- Question: What is the margin profile and strategic fit for the C&I business? (Shweta/Cantor)
- Answer: C&I offers high margins (₹0.75+ per unit) with minimal capex. We are targeting data centers by offering end-to-end power infra and supply solutions, a unique capability in the Indian market. (Kandarp Patel)
Key Takeaway
Adani Energy Solutions delivered a resilient Q3 FY26, characterized by a 30% adjusted PAT growth and a widening project pipeline now reaching ₹78,000 crores. While execution in the transmission segment faced minor 1-2 month delays due to abnormal rainfall, the company is on the cusp of a massive capitalization cycle, with ₹25,000 crores of assets expected to turn operational by FY27. Strategically, AESL is diversifying its earnings through high-margin Smart Metering—now reaching 92 lakh installations—and a rapidly growing C&I segment (1,300 MW load). Financial management remains disciplined, with a net debt-to-EBITDA of 4.3x and a clear roadmap to refinance upcoming USD maturities without equity dilution. Management maintains a bullish outlook on the national transmission grid expansion, targeting a significant share of the upcoming ₹1 lakh crore tendering pipeline.
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