Advait Energy — Q3 FY25 earnings call

Call held 14 Feb 2025

Management summary

Advait Energy Transitions Limited reported strong financial performance for Q3 FY25, with revenue growing 30% YoY to ₹94 crores and PAT increasing 34% YoY to ₹10 crores. The company's unexecuted order book stood at ₹476 crores as of December 2024, with significant contributions from both Power Transmission Solutions (PTS) and New and Renewable Energy (NRE) divisions. Advait is actively expanding its NRE segment, including green hydrogen and battery storage, while maintaining a healthy financial position with improved debt-equity and current ratios.

Highlights

  • Q3 FY25 Total Revenue: ₹94 crores, up 30% YoY.

  • Q3 FY25 EBITDA: ₹15 crores, up 24% YoY, with a margin of 16.0%.

  • Q3 FY25 PAT: ₹10 crores, up 34% YoY.

  • 9M FY25 Total Revenue: ₹200 crores, up 35% YoY.

  • 9M FY25 EBITDA: ₹33 crores, up 38% YoY, with a margin of 16.4%.

  • Unexecuted Order Book (UOB) as of Dec 2024: ₹476 crores.

  • Debt-Equity ratio improved to 0.29 as of Dec 2024 (from 0.48 in March 2024).

  • Net cash position: ₹30 crores as of Dec 2024 end.

Key financials

2 periods

Q3 FY25

  • Total Revenue
    ₹94 Cr
    YoY +30%
  • EBITDA
    ₹15 Cr
    YoY +24%
  • EBITDA Margin
    16%
  • PAT
    ₹10 Cr
    YoY +34%

9M FY25

  • Total Revenue
    ₹200 Cr
    YoY +35%
  • EBITDA
    ₹33 Cr
    YoY +38%
  • EBITDA Margin
    16.4%

What they filed

Q1 FY27: revenue up 76.7%, net profit up 62.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue48 94 95 73 95 +98%125 +33%154 +62%129 +77%
EBITDA9 15 14 12 15 +67%21 +40%23 +64%21 +75%
Net profit6 10 10 8 10 +67%13 +30%15 +50%13 +63%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Power Transmission Solutions (PTS)
    90% Revenue Share
  • New and Renewable Energy (NRE)
    8% Revenue Share

Order book

high confidence

Total value

₹476 Cr

as of 2024-12-31 quantified

Execution

PTS division orders to be executed in next 9 months, NRE division orders in next 12 months.

Composition

Mix 2 segments
  • Power Transmission Solutions (PTS) 57.4%
  • New and Renewable Energy (NRE) 42.6%

Share of order book by segment

Pipeline

other

Pipeline for solar projects, green hydrogen projects, and RDSS.

The unexecuted order book of ₹476 crores is robust, with PTS orders executable in 9 months and NRE orders in 12 months, indicating strong near-term revenue visibility.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed
    • Electrolyzer manufacturing plant (300 MW/year capacity)
    • Advanced fuel cell system manufacturing (commencing FY26)
    • Electrolyzer and fuel cell plant (30km from Ahmedabad, total length requirement 55,000 meters, electrolyzer plant up to 1 GW in 2-3 years, fuel cell first plant manual capacity 50 MW for 1-2 years, then automated line up to 400 MW)
    At present we are constructing a plant for manufacturing electrolyzers capacity of 300 megawatts per year. (Page 4) ... The manufacturing of advanced fuel cell system will be likely to commence by FY26. (Page 4) ... Our manufacturing phase for the first 300 megawatts should be completed by year 2026. (Page 9) ... I think we are putting up the plant about 30 kilometers away from Ahmedabad. The total length requirement will be about 55,000 meters for the electrolyzers and fuel cell both. Our facility for both the units will be separate and our electrolyzer plant will be upended up to 1 gigawatt in the next 2 to 3 years. (Page 14) ... for the fuel cell side, we will be putting up the first plant as a manual capacity wherein we will just manufacture the stack and the balance will integrate that is 50 megawatts for the first one or two years. And then we have tied up with the ThyssenKrupp to provide our complete automated line to scale up the capacity up to 400 megawatts a year. (Page 14)
  • Debt Debt disclosed
    Debt Equity ratio improved at 0.29 times as on Dec 2024 vs 0.48 as of March 2024 (Page 5)
  • M&A TECO Joint venture · Announced · Consideration ₹[object Object] (cash)

    Licensing arrangement to produce fuel cell.

    See, In this joint venture, we are obligated to invest 2 million. Consequently, the Indian JV will obtain a licensing arrangement to produce the fuel cell.
  • Liquidity Cash ₹30 Cr Company has a comfortable net cash position and improved current ratio.
    The company has comfortable net cash position at 30 Cr as of Dec'24 end (Page 5) ... Current Ratio also improved to 1.73 for 9MFY25 vs 1.41 FY24 (Page 5)

Guidance & targets

Growth

  • PTS division growth momentum Growth · next 5-10 years · High confidence Continue over next 5-10 years
    We foresee the growth momentum to continue over the next 5-10 years.

    — Shalin Sheth

  • NRE division surpassing PTS division Growth · coming future · Medium confidence Surpass PTS division
    At the same time, we believe in the coming future, our New and Renewable Energy division will surpass the Power Transmission division.

    — Shalin Sheth

  • Top line and bottom line growth rate Growth · future · Medium confidence 50% CAGR
    At the moment, yes we are eyeing for that kind of business.

    — Shalin Sheth

Profitability

  • EBITDA margin Profitability · ongoing · High confidence 15-17%
    Historical our company has been able to achieve the EBITDA always between 15% to 17% in past eight quarters. We would like to continue this momentum.

    — Shalin Sheth

PLI Benefit

  • Total PLI benefit for electrolyzers PLI Benefit · over 5 years, commencing 2026-27 · High confidence INR440 crores
    Our first PLI scheme will be likely to commenced for us from year 2026-27. And this will be remain continue over the period of 5 years and we are supposed to get the total PLI benefit for 300 megawatts per year over the period of 5 years. So total PLI incentive available to the company is approx. INR440 crores.

    — Shalin Sheth

Capacity Utilization

  • OPGW manufacturing capacity utilization Capacity Utilization · at the moment · High confidence 30-35%
    So at the moment, we are using about 30% to 35% of the OPGW manufacturing capacity because it is just a second year of the operation.

    — Shalin Sheth

Market Growth

  • OPGW market growth Market Growth · globally · High confidence 15-20% CAGR
    globally will keep growing at the CAGR of 15% to 20%.

    — Shalin Sheth

Carbon Credit

  • Carbon credit inventory increase Carbon Credit · by end of next year · Medium confidence 10 times
    I believe that by end of the next year this number should be increased by 10 times at very minimal cost.

    — Shalin Sheth

Electrolyzer Manufacturing

  • First 300 MW electrolyzer manufacturing completion Electrolyzer Manufacturing · by 2026 · High confidence Completed by 2026
    Our manufacturing phase for the first 300 megawatts should be completed by year 2026.

    — Shalin Sheth

  • Electrolyzer supply commencement Electrolyzer Manufacturing · end of 2026 and first year of 2027 · High confidence Supply by end of 2026 and first year of 2027
    And we will be able to supply the same by end of 2026 and the first year of 2027.

    — Shalin Sheth

Indigenization

  • Electrolyzer components domestic supply Indigenization · in 3 years · High confidence 85%
    Overall, it will take at least 3 years to have the complete ecosystem. And we have been working to produce at least of 85% of the electrolyzers component in-house, in domestic basis.

    — Shalin Sheth

Revenue

  • Carbon consultancy revenue Revenue · next year · High confidence INR2 crores
    So, as I have given the numbers to you that we are looking forward for the carbon consultancy of INR2 crores for the next year.

    — Shalin Sheth

  • Carbon credit selling revenue Revenue · spread over 3-5 years · Medium confidence INR13 crores
    And then we have the significant numbers in terms of carbon credits to be received from them and total revenue we are looking forward is INR13 crores. ... These 13 crores is spreaded between 3 years to 5 years.

    — Shalin Sheth

  • Battery business annuity revenue Revenue · for 12 years · High confidence INR16 crores per year
    And I think you asked a question about this INR130 crores, and I said it is an annuity of 12 years, but presently, year-wise, our revenue will be INR16 crores per year for the battery business.

    — Shalin Sheth

Market Share

  • ERS maximum market share Market Share · next 5 years · Medium confidence Maximum market share
    And we look forward that we being among the very few manufacturers in the world and maybe one or two manufacturers in India at the moment, we take a position so that we can take the maximum market share for next 5 years. And this year it is going to happen.

    — Shalin Sheth

Product Mix

  • NRE division product mix growth Product Mix · per year · Medium confidence 5% per year
    Broadly we can talk that it will grow by 5% in terms of product mix per year.

    — Shalin Sheth

What to watch in Q4 FY25

30 MW Solar Project Completion

next quarter (Q4 FY25)
Current Expected to be completed in February 2025
Target Completion and revenue recognition in Q4 FY25

Why it matters

Verifies execution capability in the NRE segment and contributes to revenue recognition.

At the moment, we are executing our first solar project of 30 megawatts, which will be completed in the month of February 2025.

Risks & concerns

  • Solar project delays due to energy transition phase

    medium

    Solar projects are getting delayed or not coming as predicted because they need to be integrated with battery projects and other energy transition phases.

    Management acknowledged

  • Competition from large players in green hydrogen

    medium

    Large players like Reliance and Adani are also in the green hydrogen space, but they are primarily focused on their own consumption, leaving ample space for other quality manufacturers.

    Analyst downplayed

Q&A highlights

5 direct
Solar business order book composition (IPP vs EPC) Direct
At the moment, we are executing our first solar project of 30 megawatts, which will be completed in the month of February 2025. We are looking forward for the pipeline of 200 megawatts of solar projects. We are not taking solar projects on IPP basis.

Clarifies the company's strategy to focus solely on EPC for solar projects and provides pipeline visibility.

Asked by Raj, Individual Investor

Solar EPC realization per megawatt Direct
If you are asking about the realization of the revenue, so normally the solar EPC project is giving the revenue recognition of about INR3 crores to INR3.5 crores per megawatt. And we expect that by end of the project or by end of the month even our first project will also have the realization to these numbers.

Addresses concerns about low realization for a specific project and sets expectations for future project profitability.

Asked by Raj, Individual Investor

Green Hydrogen (GH2) EPC order book and pipeline Direct
For Green hydrogen, our order book is of 1 megawatt, which is having the revenue recognition about INR10 crores to INR12 crores. And another project on which we have worked out and it is in a finalization stage in terms of project financing by our customer.

Provides specific details on the current GH2 order and future pipeline, indicating early traction in this new segment.

Asked by Raj, Individual Investor

OPGW capacity utilization and market outlook Direct
So at the moment, we are using about 30% to 35% of the OPGW manufacturing capacity because it is just a second year of the operation. We look forward that this market within India and globally will keep growing at the CAGR of 15% to 20%.

Highlights current capacity usage and the significant growth potential of the OPGW market, driven by government initiatives.

Asked by Raj, Individual Investor

NRE division margin outlook compared to PTS Partial
Otherwise, we are looking forward for a healthy EBITDA margin for this division. Historical our company has been able to achieve the EBITDA always between 15% to 17% in past eight quarters. We would like to continue this momentum.

Indicates management's focus on maintaining healthy margins in the NRE segment, aligning with overall company profitability.

Asked by Suruchi Parmar, NX Wealth Management

PLI scheme details for electrolyzers Direct
Our first PLI scheme will be likely to commenced for us from year 2026-27. And this will be remain continue over the period of 5 years and we are supposed to get the total PLI benefit for 300 megawatts per year over the period of 5 years. So total PLI incentive available to the company is approx. INR440 crores.

Provides clear financial and timeline details for the significant PLI benefits expected from electrolyzer manufacturing.

Asked by Suruchi Parmar, NX Wealth Management

Competition in the green hydrogen space Partial
There are large players also who have got the PLI and who are also putting up their plant but looking to the overall requirement of the electrolyzers and green hydrogen equipment in India, looking to the requirements what we are going to produce will be less than 1% or 1.5%. Number two, facing the competition, the big companies, maybe Reliance or Adani, they will be precisely working for their own consumption for production of the hydrogen.

Addresses concerns about competition from large players by highlighting market size, niche focus, and the potential for collaboration.

Asked by Kushal Kasliwal, Inved Research

Electrolyzer facility capex and spending timeline Partial
So, first of all, we have not mentioned that we will be spending INR330 crores for the electrolyzers. We will keep on discussing about this budget and capex for the electrolyzers. Now, we have done the technology tie-up. So, we have spent some of the amount for the technology tie-up for electrolyzer business. We have given some advances for the land and we have worked out some licensing agreement and some of the software. This is the amount we have spent at the moment. We believe that our major spending will come in the year 2026-27 for this plant.

Clarifies that specific capex figures for the electrolyzer plant are not yet disclosed, but outlines initial investments and the timeline for major spending.

Asked by Raj, Individual Investor

3 min read 6 chapters

Detailed narrative

Q3 FY25 Financial Performance Overview

Advait Energy Transitions Limited reported a robust Q3 FY25, with total revenue reaching ₹94 crores, marking a 30% year-over-year growth compared to ₹73 crores in Q3 FY24. EBITDA for the quarter stood at ₹15 crores, a 24% increase from ₹12 crores in the prior year, with an EBITDA margin of 16.0%. Net profit after tax (PAT) grew by 34% to ₹10 crores from ₹8 crores in Q3 FY24. For the nine months ended December 31, 2024, the company achieved a total revenue of ₹200 crores, up 35% YoY, and an EBITDA of ₹33 crores, up 38% YoY, with a margin of 16.4%.

Power Transmission Solutions (PTS) Division Performance

The PTS division continues to be the primary revenue driver, contributing 90-92% of the company's total revenue. This division focuses on import substitution manufacturing for products such as stringing tools, emergency restoration systems, OPGW, and optical fiber cables. The unexecuted order book for PTS as of December 2024 was ₹273 crores, with execution expected within the next 9 months. This includes ₹165.5 crores from DISCOM EPC, ₹35 crores for OPGW, and ₹49 crores for manufacturing tools and ERS. Management anticipates continued growth momentum for the next 5-10 years due to increasing power transmission line requirements.

Strategic Expansion in New and Renewable Energy (NRE) Division

Advait Energy is strategically expanding its NRE division, which currently contributes 8-10% of total revenue, with an ambitious goal to surpass the PTS division in the future. The NRE division encompasses solar EPC, battery storage, green hydrogen equipment manufacturing, and carbon solutions. The company has secured an unexecuted order book of ₹203 crores for NRE, expected to be executed within 12 months. This includes ₹130 crores from the battery segment, ₹14 crores from GH2 EPC, and the balance from solar EPC.

Green Hydrogen Initiatives and Manufacturing

The company has made significant strides in green hydrogen, completing its first small microgrid project in February 2024. A new 1-megawatt project is expected to be completed by June 2025, with another 15-megawatt project in the finalization stage. Advait is constructing a plant for manufacturing electrolyzers with a capacity of 300 megawatts per year, aiming for 85% domestic component integration within three years. The company also secured PLI through SECI for electrolyzer manufacturing, with a total benefit of ₹440 crores over five years, commencing FY27.

Solar and Battery Storage Solutions Progress

In the solar EPC space, Advait is focused on developing 100 megawatts of credentials, with 30 megawatts nearing completion by February 2025. The company is also discussing over 200 megawatts of solar EPC projects in its pipeline. For battery energy storage systems, Advait secured a 50-megawatt project on an annuity basis for 12 years with GUVNL, which is expected to generate ₹16 crores annually. The company aims to achieve maximum market share in the Emergency Restoration System (ERS) segment within the next five years.

Financial Health and Capital Allocation

Advait's financial health improved significantly, with the debt-equity ratio reducing to 0.29 as of December 2024 from 0.48 in March 2024. The current ratio also improved to 1.73 for 9M FY25 from 1.41 in FY24. The company maintains a comfortable net cash position of ₹30 crores as of December 2024 end. Advait secured ₹107.44 crores through preferential allotment in FY25, with ₹88.58 crores already received and deployed for business expansion. The company has also entered a joint venture with TECO, investing 2 million USD, for a licensing arrangement to produce fuel cells.

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