Adani Green — Q2 FY25 earnings call

Call held 23 Oct 2024

Management summary

AGEL delivered consistent 20% growth in H1 FY25 while making major strategic moves including 5 GW Maharashtra LOA, first Google data center C&I deal, and articulating battery storage ambitions. The company maintained its 6 GW FY25 target despite extended monsoon causing some delay. Battery prices have dropped 66% in 2 years, creating exciting coupling opportunities with solar.

Highlights

  • H1 FY25 revenue from power supply up 20% YoY to INR 4,836 crores

  • H1 EBITDA up 20% YoY to INR 4,518 crores; cash profit surged 27% to INR 2,640 crores

  • 2.9 GW greenfield additions over past year; operational capacity at 11.2 GW

  • H1 energy sales up 20% YoY to 14.1 billion units

  • Won 5 GW Maharashtra LOA for 25-year fixed tariff PPA

  • Signed first C&I deal with Google for 61 MW data center power supply

  • Merchant revenue of INR 1,070 crores in H1; solar INR 2.85/unit, wind INR 5.43/unit

  • Run rate EBITDA of INR 10,800 crores for 11.2 GW; expected INR 16,000+ crores post FY25 additions at 17 GW

Key financials

2 periods

Headline

  • Operational Capacity
    11.2 GW
  • Run Rate EBITDA (Current)
    ₹10,800 Cr
  • Expected Run Rate EBITDA (Post 6 GW)
    ₹16,000 Cr

H1

  • Revenue from Power Supply
    ₹4,836 Cr
    YoY +20%
  • EBITDA from Power Supply
    ₹4,518 Cr
    YoY +20%
  • Cash Profit
    ₹2,640 Cr
    YoY +27%
  • Energy Sales
    14.1 billion units
    YoY +20%
  • Merchant Revenue
    ₹1,070 Cr

What they filed

Q1 FY27: revenue up 16.6%, net profit up 19.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue3,005 2,340 3,073 3,800 3,008 +0%2,618 +12%3,502 +14%4,431 +17%
EBITDA2,217 1,880 2,402 3,042 2,603 +17%2,241 +19%2,882 +20%3,985 +31%
Net profit515 474 383 824 644 +25%5 −99%514 +34%983 +19%
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

  • Merchant Solar (H1 avg)
    ₹2.85/unit Realization
  • Merchant Wind (H1 avg)
    ₹5.43/unit Realization
  • FY25 Capacity Plan
    5 GW Solar1 GW Wind
  • Merchant/Infirm Capacity
    2.75 GW Operating Merchant
  • NCI (Total JV) EBITDA
    ₹2,500 Cr JV EBITDA₹1,250 Cr NCI Share (50%)

Guidance & targets

Capacity Addition

  • FY25 Target Capacity Addition · FY25 · High confidence 6 GW
    We are committed to our 6-gigawatt capacity addition this year

    — Amit Singh

Capacity

  • Minimum Annual Run Rate Capacity · FY26+ · Medium confidence 6 GW per year going forward
    we're actively also making progress towards construction and adding capacities... with a minimum run rate of 6-gigawatt going forward

    — Amit Singh

Financial

  • Post-FY25 Run Rate EBITDA Financial · FY26 · High confidence INR 16,000+ crores on 17 GW
    we will have a run rate EBITDA in excess of INR16,000 crores on an install base of 17 gigawatt

    — Amit Singh

Capacity Split

  • FY25 Wind Merchant Capacity Split · FY25 · High confidence 80% of wind on merchant
    80% of the wind capacity is going to be on a merchant market as well

    — Amit Singh

Risks & concerns

  • Extended monsoon delaying Khavda construction by about a month

    medium

    Within 10% standard S-curve variation; one-third of incremental capacity expected this quarter, remainder by year-end

    Management downplayed

  • High reliance on merchant revenue with volatile pricing

    medium

    2.5-3 GW on merchant/infirm; solar dropped from INR 3.11 in Q1 to INR 2.59 in Q2 due to excessive hydro generation; wind strong at INR 5+/unit

    Analyst acknowledged

  • DISCOM reluctance to sign PPAs creating pipeline uncertainty

    medium

    FDRE and hybrid tenders seeing slow PPA conversions; RPO obligations expected to drive DISCOM signing

    Both acknowledged

  • Transmission connectivity delays across India

    medium

    Visible delays in some areas but AGEL derisked for next 2-3 years with clear line-of-sight on evacuation for 50 GW target

    Both acknowledged

Areas of evasion (3)

  • Google deal pricing
  • PSP storage cost per unit
  • Exact land bank details

Q&A highlights

2 direct
Google C&I Deal and Data Center Opportunity Partial
pricing is commercially sensitive, but it is significantly higher than what you would get in normal long-term discom PPAs

First C&I data center deal signals premium pricing channel; AGEL uniquely positioned with geographic diversification for RTC solutions

Asked by Sabri Hazarika

Battery Storage Strategy and Pricing Trends Direct
battery prices have dropped by an impressive 66%... This downward trend is going to be a long-term downward trend

Management articulating battery storage as new strategic pillar alongside solar, wind, and PSP for first time

Asked by Nikhil Abhyankar

DISCOM PPA Signing Reluctance and Product Mix Evolution Direct
Some of the complex tenders... the product mix is not necessarily a fixed product mix... FDRE has seen slow tie-ups but hybrids are moving

Provides nuanced view of evolving tender landscape and DISCOM behavior affecting the entire sector

Asked by Vijay Kumar

1 min read 5 chapters

Detailed narrative

Strong H1 Financial Performance

AGEL delivered 20% growth across revenue and EBITDA in H1 FY25. Revenue from power supply reached INR 4,836 crores and EBITDA INR 4,518 crores. Cash profit growth was even stronger at 27% YoY to INR 2,640 crores. Run rate EBITDA for 11.2 GW stands at INR 10,800 crores.

6 GW FY25 Target With Back-Loaded Execution

Management committed to 6 GW for FY25 (5 GW solar, 1 GW wind) with most additions in H2 after extended monsoon. One-third expected in Q3 and remainder in Q4. Post-addition, run rate EBITDA projected at INR 16,000+ crores on 17 GW. Khavda workforce expanded to 9,000+.

Khavda Wind Performance and Solar CUF

First 250 MW wind capacity commissioned with India's largest 5.2 MW WTGs showing CUF north of 44% in stabilization. Full-year wind CUF expected above 35%. Solar CUF at Khavda expected above 32% full-year, vs 24% portfolio average - set to lift overall portfolio CUF as Khavda proportion grows.

Maharashtra LOA and Google C&I Deal

Won 5 GW Maharashtra solar LOA with 25-year fixed tariff PPA across 4-year execution timeline. Signed first C&I deal with Google for 61 MW data center power at significantly higher than DISCOM PPA rates. Data center demand identified as major growth opportunity.

Battery Storage and PSP Strategy

Battery prices dropped 66% in 2 years. Management sees BESS as complementary to PSP, not replacement. PSP still cheaper on LCOE basis, provides 100-year life, voltage control, and 6-7 hour discharge. AGEL has access to 20+ GW PSP sites. Both solutions will be deployed to capture peak-offpeak arbitrage.

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