Synopsis: Adani Energy Solutions delivered a steady Q2 with rising profits and strong smart metering growth. But with mixed signals across segments, should investors buy, sell, or hold the stock?
The power utility sector saw mixed sentiment as one of its leading players reported steady quarterly performance marked by resilient transmission revenues and strong smart metering growth. While profitability improved sequentially, investors remained cautious amid moderate demand in distribution areas affected by seasonal trends.
Adani Energy Solutions Ltd, with a market capitalization of Rs. 1,11,064.59 crore, opened at Rs. 941 on Tuesday against its previous close of Rs. 946.35. The stock touched an intraday high of Rs. 943.60, marking a marginal decline of 0.29 percent from the previous session’s close.
Financial Snapshot – Q2FY26
Quarter-on-Quarter (QoQ): For the quarter ended September 2025, Adani Energy Solutions reported consolidated sales of Rs. 6,596 crore, down 3.3 percent from Rs. 6,819 crore in the June quarter. Operating profit rose 8.0 percent to Rs. 1,955 crore from Rs. 1,811 crore, and the operating margin expanded from 27 percent to 30 percent. Profit before tax grew 13.4 percent to Rs. 746 crore from Rs. 658 crore. Net profit increased 3.3 percent to Rs. 557 crore from Rs. 539 crore, while earnings per share improved from Rs. 4.27 to Rs. 4.44.
Year-on-Year (YoY): On an annual comparison, sales rose 6.6 percent from Rs. 6,184 crore to Rs. 6,596 crore. Operating profit grew 14.0 percent from Rs. 1,715 crore to Rs. 1,955 crore, with the margin improving from 28 percent to 30 percent. Profit before tax was higher by 25.6 percent, rising from Rs. 594 crore to Rs. 746 crore. Adjusted net profit stood at Rs. 557 crore, up 21 percent year-on-year after factoring out the one-time deferred tax gain of Rs. 314 crore in Q2FY25. Earnings per share declined from Rs. 5.62 to Rs. 4.44 due to that base effect.
Segment-wise Financial Highlights
In the transmission segment, operating revenue increased from Rs. 1,197 crore to Rs. 1,305 crore, up 9.0 percent year-on-year. Operating EBITDA rose 10.6 percent to Rs. 1,216 crore from Rs. 1,099 crore, with the margin improving from 92 percent to 93 percent. EBIT grew 25 percent to Rs. 1,046 crore.
In the distribution business, operating revenue increased 3.5 percent from Rs. 3,014 crore to Rs. 3,118 crore. Operating EBITDA declined 5.9 percent to Rs. 492 crore, and EBIT dropped 21.4 percent to Rs. 261 crore due to lower electricity demand in Mumbai.
In the smart metering segment, operating revenue rose sharply from Rs. 8 crore to Rs. 182 crore. Operating EBITDA surged from Rs. 6 crore to Rs. 155 crore, while the margin improved from 79 percent to 85 percent. EBIT jumped from Rs. 3 crore to Rs. 72 crore.
In trading and others, operating revenue fell 53.4 percent from Rs. 624 crore to Rs. 291 crore. Operating EBITDA declined from Rs. 40 crore to Rs. 25 crore, and EBIT decreased from Rs. 37 crore to Rs. 23 crore.
Segment-wise Operational Highlights
In the transmission business, the company reported average system availability of over 99.6 percent during the quarter. Robust line availability resulted in incentive income of Rs. 30 crore in Q2FY26, reflecting efficient O&M practices. With recent project wins, the aggregate transmission under-construction pipeline stood at Rs. 60,004 crore. The company added 190 circuit kilometers of the transmission network, taking the total operational network to 26,705 circuit kilometers.
In the distribution business, comprising AEML Mumbai and MUL Mundra, AEML witnessed a 2 percent increase in volumes at 2,650 million units, driven by a rise in commercial and industrial demand. The distribution loss in AEML was among the lowest in the sector at 4.36 percent during Q2FY26.
Segment-wise Progress and Outlook
In the transmission segment, the company’s under-construction pipeline includes 13 projects worth Rs. 60,004 crore. It expects to fully commission North Karanpura, WRSR (Narendra–Pune), Mumbai HVDC, and Khavda Phase-III-A (Halvad) in FY26, in addition to three lines commissioned in Q1FY26. The near-term transmission tendering opportunity remains strong at Rs. 96,447 crore.
In the distribution business, steady performance continued with AEML’s Regulated Asset Base at Rs. 9,412 crore, comprising equity of Rs. 5,065 crore and debt of Rs. 4,347 crore, reflecting 13 percent growth year-on-year.
In the smart metering segment, the company installed 73.7 lakh smart meters cumulatively as of the first half of FY26. It plans to install at least 70 lakh new meters during FY26, targeting around one crore meters by the end of the year. The under-implementation pipeline includes 24.6 million smart meters across ten projects with a revenue potential of over Rs. 29,519 crore.
Analyst View
Investec has maintained a ‘Buy’ rating on Adani Energy Solutions with a target price of Rs. 1,290, indicating a potential upside of 36.3 percent from the previous close of Rs. 946.35. The brokerage said growth is likely to be driven by asset additions and the rollout of smart meters. It noted that power demand in Mumbai’s distribution area remained subdued due to heavy monsoon rains, while EBITDA growth was supported by strong performance in the transmission and smart metering segments.
-Manan Gangwar
Adani Energy Solutions: Should You Buy, Sell Or Hold Its Shares After Q2 Results?
Synopsis: Adani Energy Solutions delivered a steady Q2 with rising profits and strong smart metering growth. But with mixed signals across segments, should investors buy, sell, or hold the stock?
The power utility sector saw mixed sentiment as one of its leading players reported steady quarterly performance marked by resilient transmission revenues and strong smart metering growth. While profitability improved sequentially, investors remained cautious amid moderate demand in distribution areas affected by seasonal trends.
Adani Energy Solutions Ltd, with a market capitalization of Rs. 1,11,064.59 crore, opened at Rs. 941 on Tuesday against its previous close of Rs. 946.35. The stock touched an intraday high of Rs. 943.60, marking a marginal decline of 0.29 percent from the previous session’s close.
Financial Snapshot – Q2FY26
Quarter-on-Quarter (QoQ): For the quarter ended September 2025, Adani Energy Solutions reported consolidated sales of Rs. 6,596 crore, down 3.3 percent from Rs. 6,819 crore in the June quarter. Operating profit rose 8.0 percent to Rs. 1,955 crore from Rs. 1,811 crore, and the operating margin expanded from 27 percent to 30 percent. Profit before tax grew 13.4 percent to Rs. 746 crore from Rs. 658 crore. Net profit increased 3.3 percent to Rs. 557 crore from Rs. 539 crore, while earnings per share improved from Rs. 4.27 to Rs. 4.44.
Year-on-Year (YoY): On an annual comparison, sales rose 6.6 percent from Rs. 6,184 crore to Rs. 6,596 crore. Operating profit grew 14.0 percent from Rs. 1,715 crore to Rs. 1,955 crore, with the margin improving from 28 percent to 30 percent. Profit before tax was higher by 25.6 percent, rising from Rs. 594 crore to Rs. 746 crore. Adjusted net profit stood at Rs. 557 crore, up 21 percent year-on-year after factoring out the one-time deferred tax gain of Rs. 314 crore in Q2FY25. Earnings per share declined from Rs. 5.62 to Rs. 4.44 due to that base effect.
Segment-wise Financial Highlights
In the transmission segment, operating revenue increased from Rs. 1,197 crore to Rs. 1,305 crore, up 9.0 percent year-on-year. Operating EBITDA rose 10.6 percent to Rs. 1,216 crore from Rs. 1,099 crore, with the margin improving from 92 percent to 93 percent. EBIT grew 25 percent to Rs. 1,046 crore.
In the distribution business, operating revenue increased 3.5 percent from Rs. 3,014 crore to Rs. 3,118 crore. Operating EBITDA declined 5.9 percent to Rs. 492 crore, and EBIT dropped 21.4 percent to Rs. 261 crore due to lower electricity demand in Mumbai.
In the smart metering segment, operating revenue rose sharply from Rs. 8 crore to Rs. 182 crore. Operating EBITDA surged from Rs. 6 crore to Rs. 155 crore, while the margin improved from 79 percent to 85 percent. EBIT jumped from Rs. 3 crore to Rs. 72 crore.
In trading and others, operating revenue fell 53.4 percent from Rs. 624 crore to Rs. 291 crore. Operating EBITDA declined from Rs. 40 crore to Rs. 25 crore, and EBIT decreased from Rs. 37 crore to Rs. 23 crore.
Segment-wise Operational Highlights
In the transmission business, the company reported average system availability of over 99.6 percent during the quarter. Robust line availability resulted in incentive income of Rs. 30 crore in Q2FY26, reflecting efficient O&M practices. With recent project wins, the aggregate transmission under-construction pipeline stood at Rs. 60,004 crore. The company added 190 circuit kilometers of the transmission network, taking the total operational network to 26,705 circuit kilometers.
In the distribution business, comprising AEML Mumbai and MUL Mundra, AEML witnessed a 2 percent increase in volumes at 2,650 million units, driven by a rise in commercial and industrial demand. The distribution loss in AEML was among the lowest in the sector at 4.36 percent during Q2FY26.
Segment-wise Progress and Outlook
In the transmission segment, the company’s under-construction pipeline includes 13 projects worth Rs. 60,004 crore. It expects to fully commission North Karanpura, WRSR (Narendra–Pune), Mumbai HVDC, and Khavda Phase-III-A (Halvad) in FY26, in addition to three lines commissioned in Q1FY26. The near-term transmission tendering opportunity remains strong at Rs. 96,447 crore.
In the distribution business, steady performance continued with AEML’s Regulated Asset Base at Rs. 9,412 crore, comprising equity of Rs. 5,065 crore and debt of Rs. 4,347 crore, reflecting 13 percent growth year-on-year.
In the smart metering segment, the company installed 73.7 lakh smart meters cumulatively as of the first half of FY26. It plans to install at least 70 lakh new meters during FY26, targeting around one crore meters by the end of the year. The under-implementation pipeline includes 24.6 million smart meters across ten projects with a revenue potential of over Rs. 29,519 crore.
Analyst View
Investec has maintained a ‘Buy’ rating on Adani Energy Solutions with a target price of Rs. 1,290, indicating a potential upside of 36.3 percent from the previous close of Rs. 946.35. The brokerage said growth is likely to be driven by asset additions and the rollout of smart meters. It noted that power demand in Mumbai’s distribution area remained subdued due to heavy monsoon rains, while EBITDA growth was supported by strong performance in the transmission and smart metering segments.
-Manan Gangwar
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