Adani Enterprises FY 24 Quarterly Result Update

Conference Call – Q1 FY24

AEL’s Q1 FY24 results were driven by the strong performance of its green-hydrogen business, Adani New Industries Limited (ANIL), which now contributes over 10% of EBITDA.

Key highlights include:

• Consolidated total income of Rs.25,810 crores.
• Consolidated EBITDA increased by 47% year-on-year to Rs.2,896 crores.
• Consolidated PAT increased by 44% to Rs.674 crores.
• AdaniConneX secured the largest data center project financing deal in India with a USD 213 million construction facility.
• ANIL received the provisional certificate for a 5.2-megawatt prototype-1 wind turbine, with production expected this quarter.
• Airport passenger numbers grew 27% to 21.3 million in the quarter.
• Road construction is in full swing in 10 HAM and BOT projects, with 3 projects over 50% complete.
• AEL’s ESG commitment is reflected in significant CAPEX investment in green hydrogen and other sustainable businesses.

Adani Enterprises, a pioneer in the Indian Mine Development Operator (MDO) space, had a strong Q1 FY24 driven by their mining and infrastructure-related businesses. Here’s a summary:

Mining Services:

• MDO for 10 blocks (8 coal, 2 iron ore) in Chhattisgarh, MP, and Odisha.
• Delivered volumes as per schedule, generating Rs.608 crore revenue and Rs.242 crore EBITDA.

Infrastructure and Rail Logistics (IRM):

• Maintained leadership position in India with 17.8 million metric ton volume.
• EBITDA increased to Rs.1,000 crore due to improved yearly realization.

Commercial Mining:

• Holds 7 commercial blocks across Maharashtra, Chhattisgarh, MP, Jharkhand, and Odisha.
• Obtained key approvals for Dhirauli and Northwest of Madheri blocks, paving the way for further development.

Overall, Adani Enterprises’ Q1 results show good performance in their core mining and infrastructure businesses, with promising progress in commercial mining as well. They remain optimistic about maintaining their leadership position in the Indian market.

Important Questions and Their Answers

1. Question: How many projects are expected to be operational this year or next year in the road segment? What is the status of new project bidding pipelines in the road sector Answer: Three projects are expected to be completed this year. The company does not specifically flag its interest in new project bidding pipelines unless it meets their guidelines for the rate of return for HAM and BOT projects.
2. Question: Can you share the revenues and EBITDA for the quarter related to Carmichael? Is the commercial mining segment primarily corresponding to Carmichael?
   Answer: The commercial mining segment primarily corresponds to Carmichael. However, specific revenue and EBITDA figures were not disclosed.
3. Question: What are the countries where the company is exporting solar modules? Can you provide some ballpark numbers?
   Answer: The company primarily exports solar modules to the US and Europe. Specific numbers were not provided.
4. Question: Is the favorable order obtained by GMR from TDSAT applicable to Mumbai Airport? When can we expect this to be resolved and impact our tariff?
   Answer: The order generally applies only to the specific asset owner. While the resolution timeline was not specified, it was mentioned that the regulatory procedure is relatively complex.
5. Question: What are the CAPEX plans for green hydrogen, airports, and data center segments for the next 3 years?
   Answer: The CAPEX plans for the green hydrogen facility are approximately $50 billion, and the company expects to complete 1 gigawatt before the end of the decade. However, specific CAPEX plans for airports and data center segments were not provided.

Guidance

The guidance provided during the conference call included the expectation that three projects in the road segment will be completed within the current financial year. Additionally, the company expressed hope for the commencement of operations in the commercial mining segment in the current financial year. However, specific figures for expected volumes in IRM and mining services for the full year were not provided due to the dependency on the demand-supply of coal in India.

Conference Call – Q2 FY24
AEL Half-Year 2024 Results Highlights:

Strong Momentum and Growth:

• Consolidated income: INR 48,876 crore, up 43% YoY.
• EBITDA: INR 5,874 crore, up 43% YoY.
• Profit before tax: INR 1,958 crore, up 50% YoY.
• Incubating businesses contributed 48% of overall EBITDA.

Incubating Businesses Shine:

• Total income: INR 10,608 crore, up 100% YoY.
• EBITDA: INR 2,825 crore, up 100% YoY.
• Profit before tax: INR 1,210 crore, up 22x YoY.

Adani New Industries:

• Produced India’s first wafer.
• 2GW ingot wafer plant on track for FY24 end commissioning.
• Solar module plant operational.
• 5.2MW wind turbine listed for commercial operations.
• WindGuard certification received for global series production.

Adani Airport Holdings:

• Half-yearly passenger movement: 42.7 million, up 29% YoY.
• On track for 85 million passengers annually.
• DigiYatra was implemented at 5 airports.
• 2 new international airlines and 9 new routes were added.
• Navi Mumbai Airport is on schedule for end-2024 completion.

Road Portfolio:

• 4 out of 10 projects are over 50% complete.

AEL Mining and Resources Highlights – Half-Year 2024:

Mining Services:

• AEL remains a pioneer in India’s MDO (Mine Development Operator) concept.
• Delivered mining services as per schedule for 8 coal blocks and 1 iron ore block.
• Half-year revenue: INR 1,098 crore, EBITDA: INR 485 crore.

Integrated Resource Management (IRM):

• Maintained leadership position in India with 18.8 million metric ton volume.
• Half-year EBITDA: INR 2,063 crore, driven by improved realizations.

Commercial Mining:

• Carmichael mine (Australia) saw significant production and shipment increases (68% & 70% respectively).
• Hold 7 domestic commercial mine blocks across India.

Important Questions and Their Answers

Questions Asked:

1. Bharat Jain inquired about the capacity of solar manufacturing and the amount exported during the year.
2. Pratik Kumar asked about the quarterly run rate of solar modules and the potential for it to increase with better exports or higher domestic sales.
3. Nirav Shah questioned the status of the Bailadila mine and the margins on solar module sales.
4. Bharat Jain asked about the geographies for exporting and the plan for wind manufacturing capacity, including the production of 2 MW and 3 MW turbines.
5. Nirav Shah sought EBITDA numbers for Australian operations and guidance on the MDO (Mine Development and Operations) expectations for the year.

Answers Given:

1. Robbie Singh confirmed the current capacity of solar manufacturing to be approximately 4.5GW and mentioned that the company mostly exports to the US.
2. Robbie Singh stated that the number of solar modules will continue to move up in line with the utilization rate of the underlying plant and emphasized the importance of not conveying unrealistic assumptions.
3. Vinay Prakash confirmed that the Bailadila mine is officially out of the company’s list and acknowledged the strong margins on solar module sales.
4. Robbie Singh mentioned that the wind manufacturing capacity will be used for both captive consumption and export, with a starting capacity of 1.5 GW. He also discussed the focus on producing 5 MW turbines initially and the potential to produce 3 MW turbines.
5. Saurabh Shah indicated that the EBITDA numbers for commercial mining are available in the segment results and provided guidance on the expected MDO tonnage for the year.

Guidance

The full-year guidance for coal trading volumes is estimated to be between 70 million to 80 million. Additionally, the company expects a CapEx of approximately $0.5 billion for the data center business.