Adani Enterprises Ltd

NSE:ADANIENT

Earnings Call Analysis

Substantial Investment in Green Energy

The company's specialization in coal logistics over the past 25 years remains robust, with expectations that the coal market will stay above 150 million tons for years to come. Significant investments are planned, notably INR 50,000 crores in new industries, including green hydrogen, where a detailed outlook will be provided later. Capital expenditure is set to increase from INR 34,000 crores to INR 92,000 crores, with 80% allocated to green hydrogen and airports. Solar and wind energy segments are expanding, with capacities reaching 4.5 and 1.5 gigawatts, and the Windtech business is anticipated to start contributing to financials in the next fiscal year.

Indian Aviation Sector Expecting Substantial Growth Sparking Increased Airport Investment

A promising outlook has been cast for the Indian aviation market, where the current 600-700 plane civil aviation fleet is predicted to surge to about 3,000 by the year 2030. This indicative four to sixfold increase in the fleet size steers the company's investment strategy, which is shaped by long-term projections rather than yearly fluctuations. These forecasts are essential as they guide the capital expenditure (CapEx) cycles for airport infrastructure development, which typically spans across two to five years. Hence, the company is looking far ahead into the future, using projections for 2033-2035 to inform their planning and investment decisions in the aviation sector.

Significant Compensation Expected from Air India Order Post-COVID

After a favorable order win related to a major COVID event at Mumbai Airport, the company expects a notable compensation of INR 1,238 crores. However, details regarding the period within which the compensation will be recovered are set to be clarified later.

Coal Trading Decisions Yield Unusually High Profit Margins

The company has managed to achieve significantly higher EBITDA per ton in coal trading due to its strategic decisions during a market correction in the previous 6-8 months. By deferring purchases and leveraging lower sourcing costs, the company benefited from higher margins, represented in its revenue outcomes.

Carmichael Mine Targeting Major Production Goals despite Previous Delays

The company reassures that it is on track to meet the ambitious target of mining 40 million tons by FY '25, dismissing any notion of struggles. Although certain approvals were delayed, which were expected in FY '24, the company now possesses all necessary permissions, solidifying its confidence in achieving the set production goal.

Solar Manufacturing and Export Capacity Set to Soar

The firm anticipates a production ramp up to reflect the full 4 gigawatt capacity in its solar manufacturing arm. It has also reported significant strides in exports, with 1,232 megawatts already exported out of the total INR 1,882 crores of module sales.

Higher-than-Average Profit Margins Sustained

The company has sustained higher profit before tax margins, which are notably above the historical 2-3% range. This current uptick in margins is attributed to strategic purchasing decisions in the IRM business that capitalized on falling coal prices, yielding additional margins beyond the standard expectations.

Renewable Energy Production in Line with Capacity Goals

The company is well on its way to maximizing its solar model production to the anticipated capacity of 4 gigawatts within the next year. Meanwhile, the manufacturing of electrolysers is expected to become commercial by 2026. Additionally, wind technology production has steadily progressed, maintaining a level of 1.5 gigawatts.

Capital Expenditure to Skyrocket Next Year

Capital expenditures for the current year are estimated at around INR 33,600 crores across the company's ecosystem. However, a substantial increase is expected the following year, where the CapEx is projected to leap to approximately INR 92,000 crores, marking substantial growth and investment in various sectors.

Earnings Call Transcript 2024-Q3

[Operator]

Ladies and gentlemen, good day, and welcome to Q3 FY '24 Earnings Call of Adani Enterprises Limited hosted by Antique Stock Broking. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Rohit Natarajan from Antique Stock Broking. Thank you, and over to you, sir.

[Rohit Natarajan, analyst]

Thank you, Tussar. Good evening, everyone. On behalf of Antique Stock Broking, I welcome you all to the 3Q FY '24 earnings call for Adani Enterprises. We have with us from the management team: Mr. Vinay Prakash, Director Adani Enterprises and CEO of Natural Resources; Mr. Robbie Singh, CFO; Mr. Saurabh Shah, Finance Controller; and Mr. Manan Vakharia from the Investor Relations. We will start with a brief opening remarks from the management, followed by the question-and-answer session.

Thank you, and over to you.

[Jugeshinder Singh, executive]

Hi, this is Robbie, CFO for Adani Enterprises. Ladies and gentlemen, I appreciate your presence today as we discuss Adani Enterprises Quarter 3 and 9 months for the financial year '24. So that you can get through the results easily, AEL is a flagship incubator of company of Adani portfolio. Its business can primarily be divided into 2 type segments, the new and emerging businesses and the incubation portfolio, along with these established businesses in the mining and metal space.

AEL's incubation portfolio include 3 major emerging and scalable core intra businesses: green hydrogen, airports, roads under our fully owned subsidiaries [ branded ] Adani airports, Adani Roads, respectively. While the established business is comprising of mining services, commercial mining, IRM and almost ready copper business.

We are delighted to share that in the past 9 months our 3 emerging businesses demonstrated significant growth, contributing 22% to total income and 45% to overall EBITDA. Total income of these 3 businesses increased sharply by over 92% to INR 17,067 crores. Total EBITDA increased by 105% to INR 4,339 crores and total profit before tax increased to INR 1,875 crores. Higher contribution of these emerging businesses also boosted overall profits. The 9-month EBITDA of AEL increased by 58% to INR 9,592 crores, while profit before tax rose by 107% to INR 4,318 crores. Consolidated income stood at INR 77,702 crores.

Update on our major businesses. Adani new industries, Green Hydrogen Ecosystem. Our target of 10 gigawatts of green hydrogen integrated manufacturing ecosystem is progressing well. We are now ready to commission India's first ingot and wafer line of 2 gigawatts, which will go into the solar manufacturing businesses of AEL already established 4 gigawatt module capacity. Just to repeat, the ingot wafer line will primarily be for the existing 4 gigawatt of solar module line. We are also ramping up our recently commissioned green manufacturing. We produced 15 sets and have an order book of 142 sets. ANIL has received the letter of award from Solar Energy Corporation of India for setting up [ annual ] electrolyser manufacturing capacity of 198.5 megawatt.

Airport portfolio. During the quarter, 19 new routes, 9 new airlines and 5 new flights added across all 7 operational airports. Passenger movement at our airports increased 23% to 65.7 million and now tracking an annual number of over 85 million. Greenfield Navi Mumbai project is on track for completion in December this year. Phase 1 of the [ city side ] development is commencing across 90 acres -- 98 acres of land at the 5 airports.

Finally, in our Road portfolio, 4 out of the 10 projects are now more than [ 65% ] complete, and in line with the targets scheduled. Last but not the least, ESG is integral to our core plan and is embedded in our decision-making. I'm glad to share that airports have been honored with Environmental Excellence Awards in 2023 for their strong commitment to sustainability and outstanding practices in ESG.

With this, I'll hand over to my colleague, Vinay, to take you through the highlights of the primary industry portfolio. Vinay?

[Vinay Goel, executive]

Thanks, Robbie. As well as mining services is concerned, Adani Enterprises Limited is the pioneer of MDO concept in India with an integrated business model that expands across developing mine as well as the entire upstream and downstream activities. It provides the full service range, right from seeking various approvals, land acquisition, R&R, developing required infrastructure, mining, beneficiation and transportation to designated consumption points.

The company's MDO for 8 coal blocks and one iron ore block. These projects are located in the state of Chhattisgarh, MP and Orissa. The company has serviced its contract and the quantities delivered during the quarter were as per the schedule. During the 9 months, the revenue from mining services was up by 5% to INR 1,611 crores and EBITDA was up by 4% to INR 633 crores.

IRM business, Integrated Resource Management. In IRM business, we have continued to develop business relationship with diversified customers across various end user industries. We remain #1 player in India, and endeavor to maintain this leadership position going forward. The volume during quarter 3 FY '24 increased by 31% to 20.8 million metric tons. EBITDA for 9 months increased by 21% to INR 3,526 crores on account of improved realization on year-on-year basis.

Commercial mining. Under the commercial mining we have Carmichael mine in Australia. The production increased by 46% to 8.3 million metric tons and the shipment increased by 62% to 8.1 million metric ton during 9 months of FY '24. The company is also having 7 domestic commercial mine blocks. These projects are in the state of Maharashtra, Chhattisgarh, MP, Jharkhand and Orissa. In terms of our primary industry in commission, the physical progress of copper project is more than 75%, and it is expected to achieve commercial production in March 2024.

We will open for questions.

[Operator]

[Operator Instructions] The first question is from the line of Prateek from Jefferies.

[Prateek Kumar, analyst]

Congrats for great set of results. My question is on Airport business. So are we streamlined, last quarter was particularly benefiting from various events, including World Cup and some of the other events, which happened also in Gujarat making new business events. So how is that like benefiting the airports in respective cities and particularly both on aero side, in terms of passenger and non-aero side also in terms of spend per passenger. Is there any uptick that you've seen or -- on these respective airports?

[Jugeshinder Singh, executive]

Prateek, thank you for your question. We do not account for any events as a special numbers, neither do we track those things because we don't believe fundamentally, that's the correct way to look at our business. It's a consumer business. And therefore, our objective always remains on the long-term gross [ spend ] rate of both the PAX and the non-PAX. And I think it would not be correct to specifically look at events. Events can have an impact on the quarter but over a period of our forecast or either they are -- they do not contribute to the fundamental analytics other than meeting the operational requirements of heavy traffic over that 2 or 3-day period.

[Prateek Kumar, analyst]

Sure. Okay. Also, the traffic growth, how do you see traffic growth for the next year? Like passenger traffic growth, like domestic numbers have seen some moderation, like what is reported by the [ GCA ]. How do you see the traffic growth going forward in the business for the next year? And how do we see the commissioning of Navi Mumbai Airport? As you said, it is on time in December '24. So how do you see like the combined growth for Navi Mumbai and Mumbai Airport over coming 2 to 3 years?

[Jugeshinder Singh, executive]

So see, the -- we don't -- again, we don't look at traffic numbers aside from -- obviously, listing and reporting requirements on a yearly basis. Maybe underlying is that there's no -- you don't look at traffic per se. What we are underlying look at is the per capita journeys by the aggregate Indian population. So currently, per capita journey by Indian aggregate is 0.1 per capita, which is on aggregate basis, 1 journey every 10 years.

We believe that, that number will rise to at least 0.6 or higher by 2032, 2033 in the next 10-year period. It can vary, but overall, that signifies a 6x jump in the overall passenger traffic of India over this period. It is also -- we also track underlying movement of what are in terms of orders. So fleet orders will -- fleet orders indicate that 600, 700 planes that are in the Indian civil aviation fleet will rise to 3,000 by 2030.

So even the fleet are forecasting a 4x rise on the current numbers by 2030. And so therefore, that is how -- because our CapEx cycle of airports, be it on the land side, be it on the terminal side, be it on the air side is a 2- to 5-year plan. So our planning always is based on how we see the airports end up in 2033, '35 rather than next year because that's how the CapEx cycle depends.

So we believe that India is going for a 6x, somewhere between 4x to 6x rise in the airport based on the 2 indicative factors. And therefore, quarterly or 6-monthly or yearly moderation in numbers do not change the investment planning in airports over the next 10 years. And any specific variations that might occur due to weather events, due to any short-term economic events are not reflective of the underlying trend in the Indian Aviation.

[Prateek Kumar, analyst]

And just last question on airport. So there was this recent favorable order win from AI regarding post-major event during COVID at Mumbai Airport. What is the compensation do we expect as a reimbursement? And when do we expect this payment with us like relating to this order?

[Jugeshinder Singh, executive]

So effectively speaking, the order where with what we had already provided for. Other than that number, we will receive 1, 2, 3 -- 1, 2, 3, 8, INR 1,238 crores. And in terms of that's recoverable. And we -- in terms of the recovery period, et cetera, we will go through later on that very clear.

[Operator]

The next question is from the line of Mohit Kumar from ICICI Securities.

[Mohit Kumar, analyst]

First, on the coal trading. So the numbers have been very, very high per quarter. Can you please comment on this? And because the EBITDA per ton I think it's around INR [ 200 ] per ton compared to what we achieved in the last, few I think last 10, 12 quarter numbers of below INR 500 per ton. Is this something extraordinary here?

[Jugeshinder Singh, executive]

Yes. In fact, it had happened because of our some -- decision, which went well over and above were servicing this industry. We have a very high market share in India and considered that we are there in the complete supply chain and the market did corrected in last 6 to 8 months, which is visible in the revenue part. Since market was correcting and we were holding the orders, we got benefited because of our low sourcing cost -- purchase costs, which is getting affected in the results.

[Mohit Kumar, analyst]

Understood. My second question on Carmichael Mine. Is it possible to spell the -- to know the revenue and EBITDA for this quarter? Of course, I have the EBIT number, which is INR 274 crores, if you can just record the EBITDA it will be helpful, yes.

[Jugeshinder Singh, executive]

I'm not having that number handy with me. Manan, do you have the number handy with you?

[Manan Vakharia, executive]

Just a second. Almost INR 1,020 crores is the number.

[Mohit Kumar, analyst]

For the 9 months or for the quarter?

[Manan Vakharia, executive]

For 9 months.

[Mohit Kumar, analyst]

Understood. On the coal mining front, I think we are targeting 40 million tons -- 40 million tons a few years back. And I think we are still struggling at 28 million tons. Is there any issue with the ramping of the coal product coal mining? And what is the expected run rate, which you can achieve in FY '25?

[Jugeshinder Singh, executive]

So we are on our target of achieving 40 million tons in FY '25. I don't say we are struggling. We were expecting some approvals to come in time, which -- when we speak about the mining in India, it's a very lengthy and a complicated process through which we have to go and get all the permission before starting a mine. So we were expecting some permissions in FY '24, which got a little delayed. But now we have all the permission and I'm sure that I'm confident that target of 40 million tons in FY '25 is going to be likely there.

[Mohit Kumar, analyst]

From the solar manufacturing, I think we have already at 4 gigawatts, if I'm not wrong, and our production has been -- last year, last year produced over 1.2 gigawatt. And this year, we may end up 2.4 gigawatts. Can you see the run rate going to 4 gigawatt, 100% capacity utilized in FY '25. And you can comment something on the markets are we exporting? How much export in this 638 megawatt, which you sold in this particular quarter?

[Jugeshinder Singh, executive]

Yes, we expect to broadly achieve production run rate reflective of the 4 gigawatt capacity. And the exports in terms of the module sales are now -- out of the INR 1,882 crores, the exports -- the megawatt exports are 1,232 megawatts.

[Operator]

The next question is from the line of Brett from Cantor Fitzgerald.

[Brett Knoblauch, analyst]

Congrats on the results. I guess my first question was really on some of the established business profit margins. I think if you're looking at those kind of profit before tax margin, especially in higher end. It remained very strong for another quarter. Can you maybe help us understand the reasons for that improvement relative to history where it's always kind of benefit 2% to 3% margin business?

[Jugeshinder Singh, executive]

Okay. Manan, can we please address the margin uptick you addressed before, but can you address for Cantor again, please?

[Manan Vakharia, executive]

Yes. So let us discuss about this copper -- this IRM business. In IRM business, you're basically importing coal from various countries mainly Australia, Indonesia, U.S. and South Africa, and you are selling in Indian market. This is the market, which has gone up to $400 on a [ new sale ], which is a standard product has come down drastically in the last 1 year to now at $120 level. We were holding certain orders in hand, and seeing that the market is getting corrected, we hold our purchase back, and we delay the purchase basis which we got extra margin over the normal margin, which normally we get being in the service industry.

[Brett Knoblauch, analyst]

Perfect. And then maybe on -- more on the incubating side. And then forgive me if I missed that if you have already discussed this, but on the solar manufacturing and wind manufacturing capacity, I guess, how quickly do you expect to ramp up the solar manufacturing capacity over the next year or 2 years. And for the electrolyser, am I right in thinking that, that would be commercialized, I guess, within fiscal year 2026?

[Jugeshinder Singh, executive]

I mean on the solar models, we are pretty much on track for the full capacity of 4 gigawatt over the next 12 months. And on electrolysers, yes, you are correct, it's 2026. And the [ Windtech ] is continuing, and the we will -- we are pretty much on the 1.5 gigawatts and it's producing at that level of it.

[Operator]

And the next question is from the line of Dhananjay Mishra from Sunidhi Securities.

[Dhananjay Mishra, analyst]

Sir, what is the overall CapEx plan for this year? What will be the next year across the segment?

[Jugeshinder Singh, executive]

I think for this year, the total CapEx plan across AEL's ecosystem will be approximately INR 33,600 crores. And we expect next year for it to jump to approximately INR 92,000 crores. The jump in the -- in this INR 60,000 crore jump is driven by a INR 50-odd thousand crore jump in Adani new industries and a INR 10,000 crore jump in Airports. Everything else will be pretty much at the run rate level.

[Dhananjay Mishra, analyst]

So Adani new industries largely will be in solar segment or which will be...

[Jugeshinder Singh, executive]

It is across its segments. Green hydrogen will be about INR 6,000 crores. Downstream will be about INR 6,000 crores. Solar and wind power generation will take the maximum about INR 30-odd thousand and the various elements, Ingot Wafer INR 600 crores, the module and cell lines, INR 3,000 crores. Windtech about [ INR 1,000 crores ]. So it's across the board.

[Dhananjay Mishra, analyst]

And in terms of electrolyser capability, how are we placed in terms of doing some tie-up or some whatever technological thing we are accepting. So where are we placed right now?

[Jugeshinder Singh, executive]

I think on all technology developments, we are pretty much set already. There is no further new tie-up, the ongoing work continues on various matters. But the Windtech, the Ingot Wafer, the electrolyser all the fundamental tie-ups are complete in technology. We're not anticipating anything new in that area.

[Operator]

And the next question is from the line of Bharat Shah from ASK Investment Managers Limited.

[Bharat Shah, analyst]

Yes. Robbie, just one thing on the Airport business. The Indian air traffic may grow 4x to 6x is quite conceivable given all the fundamental strategic changes, which are happening in the activity. And the way government is kind of building a strong ecosystem around the air traffic activity. But given the kind of airports that we have got -- and then adding, of course, a significant addition from Navi Mumbai Airport. See it's not easy to understand how our airport portfolio can achieve that 5x or 6x kind of growth in the decade, which is upcoming?

[Jugeshinder Singh, executive]

See that our own airport CapEx plan, as we've outlined before. Itself will take our capacity to 250 million. So straight off with 3x growth will happen in the existing airports themselves. And then as the further privatization takes place across the airport portfolio that will add to this growth. So as far as -- as we look at the investment plan across the airports, we are solidly of the opinion that we will be, in fact comfortably be breaching and growing faster than India in our airport portfolio, like we have done in our ports business, which has grown consistently above the Indian cargo despite its market share.

We have very, very -- we have definitive plans. We have a unique business model in the context of India. And therefore, we believe that not only is the passenger growth that we will capture, we will also capture the gross spend rate of the non-PAX also. So the -- it is not 100% -- on the air side, where there's a direct income impact of the passenger movement -- air movement will be less than 35% of the total Adani Airport's EBITDA. 65% will come from non-PAX and non-aircraft movements and non-air side.

Therefore, the bigger focus remains on the servicing of the non-PAX and for passengers prior to entering the airport. And that number we anticipate will be at least 2x to 3x the passenger number anyways. So there 2 parts to your question. One is from the -- on the air side, are we prepared? Yes. We have already prepared our CapEx plan already takes care of the 240 million capacity.

Secondly, are we prepared for future growth in relation to building our airport platform further with the participation in the privatization? Answer to that is, yes, we are prepared and it's part of our investment plan already.

And third, are we prepared to access, which is a bigger thing, which is in EBITDA terms, 65% of EBITDA comes from gross spend rate outside of the terminals -- outside of the air side, landing fees, et cetera, regulatory income. Are we prepared to do that? Yes. As we have outlined in my opening commentary, our main focus is on the city side developments. And that CapEx actually is accelerated, and we will complete that by first phase by '26, '27.

[Bharat Shah, analyst]

Sir, essentially, what you are saying is that we are viewing that airport and aviation activity really from a larger perspective of non-PAX revenue. And it is not the PAX movement or traffic growth but overall revenue growth to be derived from the aviation activity, which is where we'll score available where the industry would be. And in that journey, almost 2/3 would come from non-PAX or relatedly less capital-intensive activity. And only 1/3 of that revenue would be more like from the PAX.

So essentially, the character of our aviation efforts would be less capital intensive and non-PAX driven activity. The total growth rate without even counting acquisition that we make it on the way overall will outgrow the industry revenue growth.

[Jugeshinder Singh, executive]

Correct. And I think I'll just clarify, so there's no misunderstanding. The air movement growth is reflected in the airside charges. And if we -- so we anticipate that whilst we will benefit from air movement and therefore airside charges. But the objective always remains to provide the best experience to anybody who interacts with the Airport space.

Now whether that is city dwellers who actually don't -- are not the passengers or people who are non-PAX but are related to that either they're bringing the passengers in, it could be service providers like Uber, Ola, et cetera, taxi, et cetera, all family members coming with the person to the airport, and the person's experience within the airport. And also, Airport has a large permanent staff also. The amenities for the staff, their ability to be able to exercise some of their consumer spend within the precinct. So it goes into what we call the rental retail mix models that you run for the type of consumer you have there in the airport.

So the passenger movement helps in relation to -- the ability in relation to the passengers and people who bring the passengers or -- are come with a passenger to the airport whereas the city side and all development are actually independent of this number. They are actually reflective of the overall general growth in the spend capacity of the Indian consumer, which itself is rising very fast.

So therefore you're benefiting not just from the air movement, you're also benefiting from the overall capacity of the Indian consumer to spend. So there are 2 things moving. So the question always becomes, are you able to capture the 2 things? And this is what the business strategy of the airport is for us to be able to capture 2 different things. So I would add to your question and say that the reason why the revenue growth and the EBITDA growth will be faster is because we capture the non-PAX improvement in the spending pattern of the Indian consumer also.

[Bharat Shah, analyst]

Right. Which is exactly what I was trying to convey. But on that, if I had to put a little critical note, just across the entire portfolio of Adani airports, I've been traveling one or the other place constantly. Almost in a month I would be taking several flights, including the Adani portfolio of the airports. I'm also familiar with the fact that non-PAX overall customer [ volatility ] through the experience in services and additionally will mean less capital intensive a way of extracting more profits from that traveler.

But in actually experience, while, for example, I recently went to Bangalore airport. And I definitely believe that it has materially improved compared to what it used to be earlier. I mean, there is no comparison between the 2 verticals then and now. But in many other airports that actual experience where you feel material difference compared to the earlier service package. While there is improvement, without any doubt, whether it is really quantum jump, I would like to put a question mark on that.

[Jugeshinder Singh, executive]

I think I'll take that as a comment. And I'll convey that to the airport leadership team that they quite particular comment of that major ones. But I think what we'll do, which I will -- want to say, what we do need to understand is that this is a 50-year business, which had to be set for achieving what it needs to see in 2033, '35 period.

It is not being set to achieve what we can achieve today. So if you are wanting to do something for today, yes, which can be done very quickly. But the aim becomes that if you look at on a -- there are -- if you look at the part that we would want to look -- we would want to check because of passengers and safety because it's safety first.

So if you say -- if you look at the benchmarks in relation to security check and Qs. Then virtually, whether you look at Trivandrum, let's look Gawahati, let's look at Jaipur, whether you look at Mumbai, whether you look at Ahmedabad, Lucknow airport. We are all -- we are much, much, much ahead of where the benchmark is.

Then the comes from immigration point of view. That also we track very carefully. And broadly, our airports are way ahead of the benchmark. The other part is a lot of people do travel by car to the airport and what is the car parking experience. And then finally, the check-in. So in these areas, these 4 critical areas of passenger experience, which relate to, one, to security and therefore, safety and all. Second to integrative work environment, which is immigration is not in our control. Check-in is the -- security queue is seen -- the integrative working be it with the CIF, be it with the immigration officials. All of that is working well.

So we check this and then everything else is designed for the longer-term experience. In terms of where we believe what it will look like when our capacities are set up for 240 million PAX. And that is actually a gestation issue. And as we go through this, you will start noticing from -- the non passengers will start noticing from '26, '27 onwards, the change, because their interactions will change. And the passenger and passengers -- people accompanying the passengers, they will certainly start noticing from about 2026 onwards, the material marked changes in the experience.

Now what you refer to is you're also a business passenger. And the specific experience related to business passengers and how they move and what their movement pattern are at the airport, that will also go a marked change as all the other services are brought into line with global standards over the next 3 to 5 years. That's why we will wait for the demerger of this business till it achieves all these benchmarks. That's why we flagged that event between 3 to 5 years from now.

[Bharat Shah, analyst]

Sure. One last thing, Robbie. On our IRM business, which is critically dependent upon feeding India's growing energy needs and therefore, sourcing efficient collating and distributing that commodity. But increasingly, the picture that you gave from a policy perspective is that coal remains one of the important items in the import bill of India. And like all the import items of India is receiving critical attention to how to minimize or reduce or in fact substitute them by export rather than import.

The policy trust appears to be that at some stage, imported coal may look to be a thing of the past or materially a thing of the past. How does it affect our IRM businesses if this were to transpired?

[Jugeshinder Singh, executive]

Vinay, Shall I take it?

[Vinay Goel, executive]

Please.

[Jugeshinder Singh, executive]

Yes. So when we think about the IRM business, I think, first of all, we need to understand that we are in this business for last nor 25 years. In last 25 years, we have actually created a sort of specialization in moving coal from ex mine to shipping, to port to handling rates and on and everything. So it is not going to be only the imported coal. You import from other countries and give it to the Indian customer. It is also going to remain a service function for us where we are doing a lot of RSR movements also.

Now as far as import is concerned, in India, even though the target has been set to make import zero long back. But on an actual basis, on a practical basis, it is not going to be zero anytime in the future also for 2 reasons: one, the first reason is that considering that the Indian coal is having a high-ash you need to import coal of low-ash to blend and run your power plants, which are designed at a lower ash.

Secondly, there are a lot of coastal-belt power plant, which are actually designed for low ash only. You talk about Tata, you talk about many plants of NTPC, many plants of private sector, they are designed for low ash.

And number third, for the power plants, which are actually very near to the coastal belt, is this always going to be a difference between the rail freight which -- or road freight which they're going to have from the intel end of country to their place, getting compared with the ocean freight and handling from Indonesia, Australia and South Africa. And if your prices are good in international market, riding international market, you always find that imported coal are going to be competitive.

So if you ask us, we are very clear that even next 5 years, 10 years, 15 years down the line, the market -- coal market will remain in excess of 150 million tons.

[Bharat Shah, analyst]

That's very helpful. I have one more question, but I'll wait in the queue.

[Operator]

And the next question is from the line of Mohit Kumar from ICICI Securities.

[Mohit Kumar, analyst]

So only one question one clarification. You're talking about INR 50,000 crores in new industries and green hydrogen is a significant part -- and is it fair to say that we are looking at targeting 0.3 million to 0.4 million tons per annum capacity. Is it possible to also tell us that are we looking to export green ammonia? Is that a fair assessment?

[Jugeshinder Singh, executive]

I think overall, we'll come up -- come with a much more detailed outlook on this -- towards September of this year. But the aim -- our first phase itself is 1 million tons. It will happen in a modular way. But we do not have a sub that scale plan with 1 million ton and then going up to 3 million tons is what we've always announced, and it remains that way. We will detail out some of the planning in regards to downstream products, whether we stop at ammonia or it will go further to fertilizers et cetera.

[Operator]

And the next question is from the line of Prateek from Jefferies.

[Prateek Kumar, analyst]

You gave this overall CapEx going from INR 34,000 crores to INR 92,000 crores. Can you give like business size CapEx for these 2 years for the company? I mean you've told about INR 50,000 crores for ANIL for next year, but what is the business price CapEx, let's say, for maybe top 5 segments in FY '24 and '25?

[Jugeshinder Singh, executive]

Our main CapEx is in green hydrogen and airports, we chop the INR 90,000 crores, which is practically nearly 80% of that just goes into these 2 segments, the airports and green hydrogen. And we have -- the rest is -- the roads will have sort of the same CapEx from this year, which is about INR 10,000 crores. Everything else is about INR 6,000 crores. So 3 big segments are infra incubating us.

[Prateek Kumar, analyst]

Okay. And on your solar module segment, do we have like -- what do we see as like FY '25 end capacity for solar modules and Windtech segment? I know electrolyser is expected in FY '26 only. But what could be the year-end capacity of FY '25 for solar module and Windtech?

[Jugeshinder Singh, executive]

4.5 and 1.5, respectively, gigawatts.

[Prateek Kumar, analyst]

Okay. So the 10 gigawatt will be scaled only in FY '26, even for solar...

[Jugeshinder Singh, executive]

Yes, yes.

[Prateek Kumar, analyst]

And your margins in solar segment has remained very strong this quarter, maybe stronger than past quarters. So there have been recent sharp decline in module prices over past 1, 2, 3 months. Is this tied to reflect in your business contracts or your customers are totally different and not getting impacted because you also have like 70% export and 30% domestic in this quarter. So how...

[Jugeshinder Singh, executive]

I think, Prateek, one thing we are infra. So therefore solar is Adani new industry ecosystem. We have absolutely nothing we can say or share what happens in 1 month, 2 months, 3 months, 6 months, prices changing, going up and down because nobody builds infra on 2- to 3-month basis. So it's not that our customers are indifferent. On the customers on the other side are infra companies, they are supplying other renewable power or they might be in India or overseas. So they are looking at their renewable green electron cost over the next 5 years, 20 years, 25 years.

So if they start timing and building based on timing, nothing will happen only. So what people look at is reliability. So it is very, very easy. This is not a manufacturing business. This is an input business into energy extraction. And the target of the customers and our own target is the minimization of the energy extraction cost on a long run basis. And so neither do we track these up and down movements on a daily basis, nor on a monthly basis or a quarterly basis. What we are targeting is, how can we extract the cheapest green electron over the longer term to remain within the first quartile cost of extraction of the green electron. And that I suspect is also the view of the majority of our client base also within that business.

[Operator]

And the next question is from the line of Brett from Cantor Fitzgerald.

[Brett Knoblauch, analyst]

On the wind turbine generator manufacturing. I know that kind of became commercial last quarter. I was just curious if there was any income from that part of the new energy ecosystem in the quarter? If so, how much? If not, I guess why don't you expect that to begin to ramp up materially to start contributing to financials.

[Jugeshinder Singh, executive]

If I understand the question correctly, Brett, the question was that when would the energy element of the new energy business contribute to financials?

[Brett Knoblauch, analyst]

Yes, the wind turbine part of that.

[Jugeshinder Singh, executive]

So we expect the Windtech is -- you will see -- in the context of ANIL, the numbers will start showing this year -- in the next financial year, actually, to March '25. Not in this quarter but over the next 12 months, the numbers will be visible of the Windtech.

[Operator]

And the next question is from the line of Bharat from ASK Investment Managers Limited.

[Bharat Shah, analyst]

No, that was pertaining to ANIL and subsequently what you answered. I heard what I wanted to.

[Operator]

As there are no further questions, I would now like to hand the conference over to management for closing comments.

[Jugeshinder Singh, executive]

Now we thank all those who asked the question and all those who joined. Thank you so much. And we also take the opportunity to thank Rohit and Antique team for organizing the call. If there are any further questions, obviously feel free to reach Manan and team and they will answer in writing. Thank you so much.

[Operator]

On behalf of Antique Stock Broking, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.