The shares of this largecap company jumped around 8 percent in Friday’s trading session despite reporting a loss of Rs. 1,091 crores. In one year, the shares have delivered more than 20 per cent to its shareholders.
Price Movemnet:
With a market capitalization of Rs. 1,22,872 crores, the shares of Adani Energy Solutions started Friday’s trading session on a higher note at Rs. 1,063.05 compared to its previous close of Rs. 1,050.15. During the trading session, the shares hit a high of Rs. 1,149.70, gaining around 8 percent and are currently trading at Rs. 1,126 apiece.
What Happened:
Such a positive movement in the share price was observed after the company declared its Q1FY25 results. The revenue increased by 14 percent from Rs. 4,706.85 crores during the March quarter to Rs. 5,378.55 crores in the June quarter.
On a YoY basis, the revenue surged by around 47 percent from Rs. 3,663.91 crores during Q1FY24 to Rs. 5,378.55 crores in Q1FY25.
The revenue growth of 47 percent, was boosted by contributions from the recently commissioned WaroraKurnool, Karur, Kharghar-Vikhroli, and Khavda-Bhuj transmission lines supported by higher energy consumption in AEML and MUL and contribution from the smart metering business.
The company’s EBITDA (earnings before interest, taxes, depreciation and amortisation) increased by 30 percent to Rs 1,628 crores. Moreover, the company during the quarter completed the acquisition of Mahan Sipat transmission assets, adding 673 circuit km to its operational network.
However, the company reported a net loss of Rs 1,191 crores for the period, compared to a profit after tax (PAT) of Rs 182 crores during Q1FY24.
Net loss was led by a one-time exceptional item of Rs 1,506 crores in the current quarter on sale of Dahanu Thermal Power Plant near Mumbai, as part of the company’s environment, social and governance goals.
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As per the company’s filing, Adani Electricity Mumbai Limited (AEML), a subsidiary, has approved selling the power plant to a related party for Rs. 815 crores, significantly lower than the book value of Rs 2,321.02 crore. The deal is still subject to necessary regulatory approvals.
Furthermore, adjusted for the exceptional charge, the company’s profit after tax (PAT) was Rs 315 crore, reflecting a 73 percent year-on-year increase.
Segment-wise Financial:
Transmission:
The company’s transmission segment reported a profit after tax (PAT) of Rs. 251 crores in Q1 FY25, a 54.8 percent increase from Rs. 162 crores in Q1 FY24. Revenue also grew by 33 percent year-over-year, reaching Rs. 1,174 crores.
The company currently has a strong under-construction project pipeline valued at Rs 17,000 crores. It is on track to commission the MP-II package, NKTL (North Karanpura), Khavda Phase-II, Part-A, and the WRSR (Narendra-Pune) lines in the upcoming quarters. Additionally, It sees opportunities over Rs 90,000 crore in tariff-based competitive bidding tenders.
Distribution:
The distribution business of Adani Energy Solutions reported an adjusted profit after tax (PAT) of Rs 51 crore, a 151 percent increase year-over-year from Rs 20 crore in Q1 FY24. Additionally, operating revenue for the quarter reached Rs 3,372 crore, up 23.2 percent compared to the previous year.
The company is also exploring multiple areas and has applied for a parallel distribution license in Navi Mumbai in Maharashtra, Greater Noida (Gautam Buddha Nagar) in UP, and Mundra subdistrict in Gujarat.
Smart Meters:
According to the company filing, the Smart Meters segment is developing successfully and is expected to make a significant contribution to AESL’s overall growth and profitability. This new segment will also provide substantial synergies with the distribution business.
In addition, the under-implementation pipeline stands at 22.8 million smart meters, comprising nine projects with a contract value of over Rs 27,195 crore. The contribution from the smart metering business has flowed into the business.
Conclusion
Despite the reported net loss, the strong revenue growth and improved operational metrics indicate a positive trajectory for Adani Energy Solutions Ltd, particularly in its transmission and distribution segments.
The company’s strategic divestment aligns with its long-term sustainability goals, positioning it favourably in the evolving energy market.
Written By Vaibhav Patil
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