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Adani Enterprises Ltd
Earnings Call Analysis
Q2-2025 Analysis
Adani Enterprises Ltd
Adani Enterprises reported a remarkable increase in financial performance for Q2 FY '25. Consolidated revenue surged by 14% to INR 49,263 crores, driven primarily by significant contributions from its emerging core infrastructure businesses, which saw a staggering growth of 85% in EBITDA, amounting to INR 5,233 crores. This reflects the company's ongoing commitment to enhancing logistical and energy transition assets within India.
The company achieved its highest ever EBITDA of INR 8,654 crores for the first half of FY '25, an increase of 47% year-on-year. Profit before tax skyrocketed by 137%, reaching INR 4,644 crores, indicating strong operational efficiency and profitability. Such growth in profit margins is a promising sign for investors, suggesting effective cost management and robust demand for Adani's services.
Adani Enterprises is planning a substantial capital expenditure of approximately INR 67,000 crores for the entire fiscal year, with a significant focus on new industries including renewable energy and infrastructure. Specific allocations include INR 28,000 crores for new industries, INR 16,000 crores for airport projects, INR 12,000 crores for roads, and INR 5,000 crores for data center developments. This investment is expected to stimulate future growth by enhancing capacity and technological capability across various sectors.
The company highlighted key developments across various sectors. For instance, the wind manufacturing segment has crossed a major production milestone with new turbine certifications. In aviation, Adani now manages about 53% of India's air passenger movements, while road construction efforts are progressing smoothly with multiple projects nearing completion. Additionally, its mining services reported a 32% increase in dispatch, showcasing the effectiveness of Adani's integrated resource management strategy.
Looking ahead, Adani Enterprises is optimistic about its expansion in renewable energy, targeting a solar and wind capacity of roughly 7 gigawatts by FY '27. The expectation is that green energy projects will require around INR 33,000 to 34,000 crores in CapEx over the next two years. This reflects the company’s commitment to leading in clean energy and preparing for increased market demand in this sector.
Management acknowledged the cyclical nature of CapEx in India, particularly due to seasonal delays from prolonged monsoons this year, which resulted in a shift in project timelines by approximately six weeks. However, they anticipate a ramp-up in activities, projecting their CapEx to align with operational updates by June 2025, thereby managing investor expectations with a clear timeline for progress.
Adani is enhancing its aviation business with ongoing projects aimed at increasing airport capacity and service routes, preparing for completion and new airline additions in early 2025. Concurrently, the company is gearing up for the AI-related data center market, aiming to establish a strong presence in hyperscale facilities while ensuring energy supply and infrastructure readiness.
Overall, Adani Enterprises appears well-positioned for sustained growth across its various sectors. The combination of strategic investments, robust revenue growth, and effective management oversight provides a resilient foundation for future success. Investors can look forward to monitoring developments in key industries and the anticipated impact of significant CapEx on the company's long-term value.
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Good day, and welcome to the earnings call of Adani Enterprises Q2 FY '25 Conference Call hosted by Investec Capital Services. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Aditya Bhartia. Thank you, and over to you, sir.
Good evening, everyone, and welcome to the Q2 FY '25 earnings call of Adani Enterprises. We have the senior management of the company represented by Mr. Robbie Singh, CFO of any Enterprises; and Mr. Manan Vakharia, Investor Relations. I would like to welcome them and thank them for giving us the opportunity to hold the call.
I would now hand the floor to Mr. Robbie Singh for opening now. Over to you, sir.
Thank you. Good evening, everyone. We welcome you to the earnings call to discuss Adani Enterprises results announced today for the quarter and half year ended 30th September. Over the years, Adani Enterprise has focused on building and infra assets contributing to addressing logistics and energy transition challenges within the country. .
AEL has emerging core infra businesses under its incubation portfolio represented by new industries, our [indiscernible] ecosystem, data center, airports and road businesses plus established business portfolio represented in primary industry work comprising mining services, metals and materials, commercial mining and industrials.
This half year, AEL has recorded its highest ever EBITDA of INR 8,654 crores. The emerging core infra businesses reported half year EBITDA of INR 5,233 crores, which is an increase of 85% on a year-on basis. Other income of integrating businesses for first half '25 increased sharply by over 53% to INR 17,287 crores, with the profit before tax increasing by 138% to INR 2,678 crores.
The consistent higher contribution of these emerging core infra boosted the overall consolidated results for the first half. Consolidated EBITDA up by 47% to INR 8,654 crores. Consolidated profit before tax up 137% to INR 4,644 crores and consolidated income up 14% to INR 49,263 crores.
Turning to the project and operational updates on major businesses. industries wind manufacturing businesses continues on its development part, which has now crossed 300 grade production milestone during this quarter. RLMM listing of 5.2 megawatt and 3-megawatt wind turbine is completed, and we further final certificate of 3.3-megawatt wind turbine is being applied for.
In the businesses, we have received a letter of award for manufacturing facility of 101.5 megawatt per annum from With this cumulative capacity what it is 30-megawatt airport businesses, the growth in potential movements has resulted in Adani Holding handling roughly 53% of India passenger movements.
During the quarter, we also tested the Southern runway of Navi Mumbai airport with the lending by Air Force plane and we expect the Air Force will be completed in 2025. In this quarter, we added 6 new routes, 6 new airlines and 13 new flights across the 7 operational airports. In the Road businesses, we completed 2 more road projects, which now takes the completed projects to 6 with the remaining 8 projects, including the Greenfield Ganga Expressway progressing as per schedule. On the growth and data center business, we'll provide a much more detailed and comprehensive update along with the annual results in May.
In the mining services portfolio, during the quarter, AEL received letter of award for development and operation of with a capacity of 7 million tonnes per annum in the state of Orissa assigned an agreement for with Ambuja Cements in the state of Maharashtra. With these new mines, business is now 9 coal blocks plus 2 IMO blocks.
During the quarter, total mining services dispatch was up by 32% to 8.2 million metric tons. Revenue increased by 64% to INR 803 crores and EBITDA increased by 65% to INR 400 crores on a year-on-year basis. In the integrated resource management portfolio, the volume of current quarter stood at 13.7 million metric tons and the revenue from IRM business INR 9,697 crores and EBITDA at INR 927 crores.
Under commercial mining, mine production is now running at roughly 15 million metric tons per year with a shipment of about 3.8 million metric tons in the quarter. We are now open for Q&A. Thank you.
[Operator Instructions] First question comes from Prateek Kumar from Jefferies.
My first question is on your CapEx number. For first half CapEx been [indiscernible] crores based on the data. Like how are we looking at CapEx because we're anticipating a much larger to the full year. How are we looking at CapEx for the year and segmental CapEx if you can provide that.
The full year CapEx for -- I will go through various segments. So in New Industries, we expect the full year CapEx to be around INR 28,000 crores. On the Airport side, a number close to completing the Navi Mumbai airport around INR 16,000 crores. And we expect the Roads to complete on schedule with the CapEx of around roughly around INR 12,000 crores small CapEx, but not a material number of ingestion to water projects. Data center, we expect to complete roughly about INR 5,000 crores and then in the remainder of the businesses, we expect to complete the CapEx for further about INR 5,000 crores.
Now the reason why this particular quarter and this half of the year is slightly slower than the because this, as you know, as in a CapEx-heavy business, there is a natural cyclicality in India due to monsoons. So during the month period, the CapEx slows down and it will start ramping up now and reaches its peak in December, Jan, March and that peak will continue till May and when the summer season starts and it starts winding down through to the monsoon.
And this year, the monsoon was out 6 or 7 weeks longer than traditional. So we might be plus/minus 6 weeks in terms of the schedule, but we expect to -- if you see our sort of operational update of June 2025, you will see that broadly the CapEx numbers will be in line.
And broadly, still we are looking at INR 70,000 crores CapEx for this year on the numbers.
I would say closer to roughly INR 67,000 crores.
And sir, regarding the ANIL segment, energy segment. Can you also lay out the time line of projects like [indiscernible] where we are? And when do we take a look at the pilot project for [indiscernible] ?
Like I said, what we can highlight overall is that the manufacturing with the exception of foundry is now particularly up and running. So from ingot wafer onwards, plus the ancillary industries are not fully integrated, which is glass, back sheet, PVA, aluminum frames. So that aspect for the is wind turbine and also from blade, assembly from that work is all already complete.
Electrolyzer, we have started the work and we expect to give you an update as to how that work is proceeding in terms of construction and development of the electrolyzer facility by March next year. There, we are pretty much on a site development work, site civil planning work for where the generation capacity of and wind will go has also commenced, and we'll have a more detailed update towards the middle of next year.
The downstream product work development probably we will be able to give an update in the next 24 months, but -- we will have a much more detailed update in relation to the first group base of manufacturing and the green power generation or a green hydrogen in the middle of the next year.
Okay. So the [indiscernible] for the ANIL segment eventually appeared very less probably at around INR 2,000 crores, [indiscernible] and we are looking to do INR 28,000 crores CapEx in this year. So this is going towards the expansion of capacity to what some what I was asking in terms of milestones in terms of capacity targets.
No, what you are referring to is the manufacturing CapEx only. You're not referring -- business, we have 3 types, 4 types of tactics. The manufacturing CapEx, which you are referring to. Then the green hydrogen development CapEx and the electrolyzer CapEx, which is electrolyzer on site, that's not the manufacturing and then the downstream CapEx of the downstream plots.
So there is a full fledged as to how we see that develop over a period of time. What you are noticing now is a stable development. So the CapEx number will start ramping up, as I said, over the next year. as we go through this development phase. So currently, the focus has been to integrate the manufacturing ecosystem that is acquired to start the in electron production for the green molecule production.
And I also talk about like the Airport segment -- how are we because now the Navi Mumbai airport is completion, how are we looking at airlines addition or the start of flights from airport by March '25 and the tie development projects electric developed at airport.
Because the first phase of the development at is underway. We have 1 more airport will start. Navi Mumbai airport should like you rightly pointed out, in the second calendar quarter of next year. The airline addition planning continues -- this time also, we reported this quarter, we also saw 6 new airlines. The various airports are starting at -- that will continue to develop.
We expect the first of our pure city side development to come online by 2026. The inter order development at Ahmedabad is already up and running, which is intermodal meaning where passengers and non-passenger and mix. And similarly, Navi Mumbai, it will also be ready the intermodal development will be ready as soon as the terminal is ready. The city side development there also could be a little bit longer.
But overall, we expect to have the silicide development in sufficiently large that large numbers that shows up in our EBITDA by end -- the other aspect of airports is the development of its JV businesses, which are ancillary business in there that is also going as planned.
[Operator Instructions] Next questions comes from, Brett Knoblauch from Cantor Fitzgerald.
Congrats on the quarter. [indiscernible] in your data center business and what you guys are seeing there in terms of pipeline and demand. I know obviously, a big trend around the world is AI and new [indiscernible] centers. Do you guys have any plans to data centers report all higher of terming market?
And have you had any kind of plans surrounding that?
Yes. So we are geared up back to for our data center business to in the ultra hyperscale data center in the AI space and also in the GPU space. We will actually make a comprehensive data center as a showcase presentation in as part of our annual results in May next year. It will be much more appropriate to go through at that time.
But suffice to say, we are fully geared up on both from energy supply point of view, from land from other productivities and infrastructure point of view for the AI data center.
[indiscernible] businesses and maybe new businesses to come. We're getting in to anywhere on the AI or that market be interesting to you guys?
Not the AI but we have large -- 2 large service businesses within AEL, which is our Adani Digital Labs and our global capability center. The digital infrastructure rollout and consequently, development of smart systems across those 2 businesses. It is a big drive internally for us because we don't report them separately at the moment because we are emerging businesses.
Our focus in the first phase over the next 5 years, is to focus on the integration of airports, green hydrogen and the roads business plus data centers. So we go -- we will actually over the back -- as we go through this development phase of our services in digital infrastructure subsidy businesses. we will be outlining them in more detail. But I expect that currently, it's more of R&D high book expenditure investment.
We expect to provide full briefings on the decent of our subsea businesses, being could they probably towards the end of this decade when they reach test.
The next question comes from from Axis Mutual Funds.
I just wanted your thoughts on the outlook for the sales of our solar panel alimentation [indiscernible] my question, sir.
And that demand remains relatively stable. I think over a period of time, we expect this capacity to actually are installed as itself could double. But -- that remain our own green hydrogen ecosystem, demand will also ramp up. There's no specifics, market shift that we can see in the short term, but over the term in manufacturing and in export industries, you can have market shifts. But as we mature this segment in relation to the scale at which Adani Green is operating and the scale at which Adani New Industry will operate.
I think as a manufacturing system itself been to remain immune to outside market risks in the medium term, given how it is situated and given the scale at which the various system comes for the group in this area are developing.
[Operator Instructions] The next question comes from Gopal from SBI Life Insurance.
My question was on -- there is a sequential moderation on the segment was a bit on ANIL. So can you just give some update on that? Why it is so.
I think as I mentioned, if you recall, I don't know whether you were on the call or not in March. Sometimes we have order spillovers, which would come after the balance date, which was in the first quarter. So the order book is now tracking at about 1.1 gigawatts and capacity is 4.5 megawatts. So we are pretty much running at capacity for the quarter. Last year last quarter, you saw you was 1.3 largely driven by sales recorded in the first quarter of which were produced previous quarter.
And this should be the run rate for the remaining part of the year?
Yes, the about 4.5 gigawatts at, so we'll run at close to about 1.1, 1.2.
There is no change in the export market in terms of...
No.
Sir, on this road assets at. So that is an improvement in quarter-on-quarter and year-on-year. In terms of revenue sequentially, there is no change. So what is driving this change, sir?
That's largely because of the achieving the commercial operations on the 2 road projects.
But there is no change in the revenues sequentially.
That is just an accounting artifact the EBITDA number is now recorded because has been achieved. So the revenue number was recorded, but because of the COD achievement, we recorded the EBITDA into the accounting now.
And the last bit was on interest on P&L. There is a drop sequentially and year-on-year also whereas we have seen net debt going up. So how should we see it, sir?
I think you should -- from a actual aspect, you should assume that the interest will remain steady and slightly rise as our -- as the businesses are constituent businesses are experienced this particular time what can happen is that we do have FX-based borrowings so there was some FX gain that is reflected in the rates approximately INR 400 crores.
So that [indiscernible] run rate should be there.
Yes, it is.
The next question comes from Mr. Aditya Bhartia.
My first question is on CapEx in ANIL. How much effect are we envisaging for the next 3 years? And how would you broadly to just CapEx into the that you mentioned, manufacturing, green hydrogen development on calcite and downstream cases.
I think we -- because we -- how we see the only we have a tighter range on let's say, the next 2 years. So I don't want to give number that could be out materially in terms of we expect that we would have a CapEx this year included plus the next year, roughly down INR 56,000 crore mark. Of this, majority you can assume that about 60% of this was maybe slightly higher than it will be in the generation of the green electron and downstream initially will be less, but will be closer to about [indiscernible] that can shift to a year later, depending on how the schedule is going.
And my second question is on the media jitter about the Adani Enterprises just to acquire Just wanted to understand what's the rationale of exploring in the construction company.
AEL is not doing that. It's a wrong media article because there is -- we have a if you see room the third page of our presentation, every presentation we have, there is a company called Adani India Infra Limited, which cover construction and that is the entity that is buying this construction -- because they need to develop their construction ecosystem given our CapEx rise and because they provide the construction assurance to various group companies.
And so they are continuing to enhance their ecosystem and build their capability.
[Operator Instructions] The next question comes from the.
Just a couple of questions. Firstly, we were the wafer capacity and in last quarter -- so how is that have fostering has that manufacturing stabilized out there.
It is vitally at a point where as we started the first wafer production, we expect complete stabilization phase over the next 3 months, and then it will start ramping up to its capacity over the next 12 months happen from any only.
Understood. Understood. And on higher in the mining side of things. How do you expect volume trends there for the remainder of the year?
Flat to -- flat to maybe slightly increasing.
The next question comes from Nirav Shah from GC Holdings.
And congrats on a very good set of numbers. So a few questions. First is on the Airport side, I mean, for our 6 PPT airports. So can you just elaborate on the net for the tire that has been approved, but it has not been receptive. So will we see all the tariff increases in place by end of the year? Or I mean, if you just think to the timeline, please, that would be helpful.
The order was received last quarter. So -- and it will start showing up in the numbers from first quarter -- or last quarter of this financial year and first quarter, second quarter next year.
So 6 careers will be between January to June.
Three airports in the and then 3 will start from about middle next year.
Perfect. And sir, second question is just on the booking side. I mean, if you can just share the EBITDA numbers for the Australian the [indiscernible] ecosystem between wind and solar.
The Australia -- Australia EBITDA is year INR 784 crores.
INR 784 crores. That's a sharp increase compared to last quarter from INR 784 crores. Okay. And sir, how much did we make in the vet ecosystem?
When EBITDA is roughly about -- just about 8% of the total ANIL ecosystem EBITDA, which is half yearly. So about 8% is green and 92% is the solar manufactoring.
This is for first half of second quarter, sir?
First half.
At our guidance for MDU operations. So we had early given guidance of [indiscernible] million tonnes for '25 and 55 million tonnes to '26. it contributed mean 2 million tonnes in this year and next year. So is it largely -- are we making the so there isn't because we've added a couple of projects.
we are maintaining and MBO will be closer to 40 instead of 45.
And next year should be largely same, 55.
Next year would be around -- just around 50% plus/minus 4% to 5%.
The next question comes from Prateek Kumar from Jefferies.
I have 2 follow-up questions. Firstly, on airports in international business, there's responds around reforming question is in national business whether for airports and section or for BPC or the business. So can you just explain we looking at the international airport business, well, how much CapEx that we're looking at in this segment?
Especially airports will not be a material part of anything that we do in the medium term main focus remains on And so it's not a material number. The subsidiary formation related to the fact that within Adani Airports, we have a very large emerging business in relation to duty free. So that's more consolidating the purchasing entity in 1 location so that we can streamline the DP3 business. The business itself also operates duty-free stores outside of our airports as well. So it has its own business plan. If there's anything specific on the report of major CapEx business, more of a concession business.
So there's no CapEx impact at this, but there is a business of B2C, which will develop outside of India as well.
And out like products, include management of inventory or buying of all products to sell in India or abroad that also pushes [indiscernible] years. And the questions on the business [indiscernible] on 6 months back how are the revenues and EBITDA of that segment, maybe for FY '25 expectations or on -- how is this an edge.
First time, meaningfully copper will appear in our numbers is the last quarter of this year. And then over the following 12 months, you will see that you will actually start seeing that in our Metals & Materials business because it will actually produce significant EBITDA and cash flow.
Okay. And last 1 an update on the -- like we in that project, say, looking at December 26 commissioning an EBITDA of INR 2,000 crores.
December 26 is the date, you can always have like, say, maximum last 6 weeks or 7 weeks due to timing of monsoon, et cetera, but we are on schedule.
And 1 more question on wafer capacity module and capacity to award in the next 2 years. But paper, we have not talked about moving from 2 megawatts. Is it now like sort of move to like later years? So how are we looking there?
No, no, no. Capacity rise in synchronization with each other. As we move further up and we stabilize the existing wafer, we will continue to rise. And then the second part of the CapEx is relatively straightforward because all of the ecosystem would have project. Different spec, you are correct. We haven't specifically talked about it, but I just want to clarify for everybody that the overall 10 gigawatt capacity will be done in synchronization. In fact, battery TBAs, et cetera entire ecosystem will still 2 to 10 gigawatt capacity.
And that is appropriate by like FY '27 or '28 or what period?
Closer to '28.
The next question comes from Dhananjay Mishra from Sunit Securities.
Yes, you said in unique terms, we will be doing CapEx close to INR 70,000 crores this year or next year and 65% will go for the part. So in terms of putting up solar power capacity or windfall facility, so what kind of profit and how do we are platoons the using CapEx on that side?
[Technical Difficulty] Ladies and gentlemen, we align the management reconnected. Please go ahead, sir.
Should I repeat my question once again?
Yes, sir, please.
So I was asking about this generation part of the thing. So for hydrogen generation solar power and wind power, vital. So how we are placed in terms of what kind of a into next year in that segment.
Next year, CapEx -- in the generation segment, total, what we have to build over a period of time, whether it starts next year or it rolls out even a year after that because once it starts, it adds quickly. But we expect that over the next 2 years, the green and solar generation CapEx to be in the order of around INR 33,000 crores, INR 34,000 crores.
And what kind of capacity we are going to put in terms of overall capacity in solar and wind power, let's say FY '27.
That would be roughly about basically close to about 7 gigawatt.
The next question comes from Chakraborty from Jefferies.
A sales the revenues become sales during '25.
Sorry, revenue from...
[indiscernible] .
Roughly INR 1,000 crores at first half.
And during this quarter, please?
INR 300 crores.
[Operator Instructions] As there are no further questions, I would now like to hand the conference over to the management for closing comments.
Now I just want to firstly just thank Investec for organizing the call. And for the participants who ask the questions and the participants who attended the call. So thank you so much, and we will -- if there are anything further, you can please reach out to Investec it and then we will respond via Investec. Thank you.
On behalf of Investec Capital Services, that concludes this conference. Thank you for joining us. You may now disconnect your lines.