Adani Energy Solutions Ltd (AESL) FY25 Results: Key Highlights and Future Plans

Rahul Chaudhary

2 months ago

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Adani Energy Solutions Ltd (AESL) – FY25 Q4 Analyst Summary

Adani Energy Solutions Ltd (AESL) has shared its performance report for FY25, showing strong growth across all key business areas. With a record order book of ₹60,000 crore and major investments in transmission, smart metering, and distribution, AESL is set for steady expansion. The company’s focus on execution, financial discipline, and sector opportunities has helped it stay on track. Here’s a simple breakdown of AESL’s performance, plans, and what lies ahead.

Date of Earnings Call: April 25, 2025

Key Management Present

Kandarp Patel – CEO
Kunjal Mehta – CFO
Anupam Misra – Head, Group Finance
Vijil Jain – Head of Investor Relations

Business Highlights of Adani Energy Solutions Ltd (AESL)

Strong Capex and Order Book Growth – Adani Energy Solutions

AESL now has a strong order book of about ₹60,000 crore, expected to be completed over the next 4–5 years.
Capital Expenditure (Capex) in FY25 was ₹11,444 crore, which is double the previous year:
- Transmission: ₹7,646 crore
- Distribution: ₹1,782 crore
- Smart Metering: ₹2,015 crore
For FY26, AESL plans ₹16,000–₹18,000 crore in capex:
- Transmission: ₹12,000–₹13,000 crore
- Smart Meters: ₹4,000 crore (targeting 70 lakh meters)
- AEML (Mumbai): ₹1,600 crore

Operational Growth and Performance

EBITDA grew by 23% YoY, showing solid business growth.
Transmission Line Availability: Very high at 99.7%, which led to ₹132 crore in incentives. This could go up to ₹200 crore with new projects.
AESL’s total network spans 27,000 circuit kilometers.
Achievements:
- Commissioned the MP Package-II transmission project.
- Acquired Mahan-Sipat Transmission Ltd.

Segment-Wise Business Update

Transmission Segment

The company sees a strong pipeline in this segment.
AESL is bidding for ₹54,000 crore worth of central grid (ISTS) projects.

Key Projects Planned for FY26:

Project Name	Estimated Cost (₹ crore)	Status/Timeline
Mumbai HVDC	7,000	To be completed by Dec 2025
Khavda Phase II Part-A	1,300
Khavda KPS-1 Pooling Station	900
North Karanpura Transmission	1,000	Delayed (environmental issues)
WRSR	2,100
Halvad (Khavda Phase III Part A)	2,700

Tariff to Capex Ratio stands at 13.77%, meaning ₹8,250 crore of revenue potential from the ₹60,000 crore investment.
In FY25, AESL won seven new transmission projects, mainly for green energy.

Distribution Business (AEML – Mumbai)

Energy sales in Mumbai grew 6% YoY; in Mundra, they went up by 44% YoY.
Distribution loss reduced to 4.7% from 5.29% in FY24.
Mumbai’s power supply is now 36% from renewable sources, the highest in India.
AEML was named the #1 power distributor in India for the third year in a row.
AESL is also exploring new opportunities in state DISCOM privatization, starting with Uttar Pradesh.

Smart Metering Business

32 lakh smart meters installed by the end of FY25.
The current daily installation rate is about 27,000 meters per day.
The FY26 goal is to reach 70 lakh more meters, aiming for 1 crore total meters by year-end.
Still, 10–11 crore meters across India are yet to be bid out.
AESL wants to keep a 22–23% market share, targeting 2.2–2.3 crore meters in the next tenders.
Expected profit per meter: ₹1,350 per year.
Average cost per meter: ₹5,500–₹5,800.
The company currently holds ₹500 crore worth of smart meter inventory.

Financial Position of AESL

Metric	Value
Net External Debt	~₹32,000 crore
Net Debt to EBITDA Ratio	~3.2x (at hedged rates)
Cash & Cash Equivalents	~₹8,500 crore
Transmission Assets Value	₹32,000 crore
Total Fixed Assets	₹42,000 crore
FY25 Capex Capitalized	₹9,500 crore

Operating EBITDA in transmission grew from ₹3,800 crore to ₹4,400 crore YoY.

Industry and Policy Updates

Central and state governments are preparing to launch many new transmission projects.
Many states still need to issue smart metering tenders, so the market remains large.
DISCOM privatization in UP could become a model for other states.
There are still grid bottlenecks for renewable energy transmission, but coordination is improving.
AESL will only take on new projects if they meet return and execution goals.

Key Takeaways from Investor Q&A

Refinancing of 2026 Bonds: AESL is open to both domestic and international options.
Dividend Policy (AEML/QIA): Extra cash will be used as per bond rules, with a focus on reducing debt.
Management feels confident in their ability to fund ongoing and future projects.
Mumbai HVDC is on track for completion in Q3 FY26.
AESL plans to maintain a 22–23% market share in the smart metering business.

Management Outlook – Adani Energy Solutions

The management is optimistic about:
- Growth in renewables
- New transmission projects
- Smart meter expansion
- Power distribution privatization
Execution and financial discipline remain top priorities.
AESL expects steady growth in transmission, distribution, and metering for the next several years.

Challenges and Risks

Some projects are facing delays due to regulatory or environmental issues.
Smart meter and privatization efforts depend on state government policies, which can cause uncertainty.
High capital requirements continue, but the management says they have enough funds to manage it.

Other Notable Points

Incentive income is expected to increase with new project completions.
Differences in reported and operating EBITDA come from EPC work, treasury, and trading profits.
AESL’s smart metering business does not depend on US imports, so there’s no risk from US tariffs.

Adani Energy Solutions Ltd (AESL) has shown strong performance in FY25. The company has expanded its order book, invested in growth, and kept financials stable. AESL is focusing on smart execution, expanding in high-potential areas like smart meters, transmission, and distribution privatization.

The company’s growth path looks clear, with steady revenue and asset expansion expected. With smart project selection and financial discipline, Adani Energy Solutions Ltd (AESL) is in a solid position for future success.