Adani Green — Q3 FY25 earnings call

Call held 24 Jan 2025

Management summary

AGEL delivered solid 9M FY25 results while navigating DOJ indictment concerns and extended monsoon challenges at Khavda. CEO Amit Singh reaffirmed the 5 GW FY25 target with massive Q4 catch-up of 4.3 GW. The company made a strategic pivot to include BESS alongside solar, wind, and PSP, citing significant battery cost declines. Financing remains robust with domestic lenders showing strong interest despite governance concerns.

Highlights

  • 9M FY25 energy sales up 23% YoY to 20 billion units

  • 9M revenue from power supply grew 18% YoY to INR 6,829 crores

  • 9M EBITDA up 18% YoY to INR 6,366 crores; cash profit surged 23% to INR 3,630 crores

  • 3.1 GW greenfield additions on YoY basis, 37% growth, total operational 11.6 GW

  • Updated strategy to include large-scale BESS deployment; BESS capex at INR 1.3-1.4 crores per MWh

  • FY25 capacity target reaffirmed at ~5 GW with 4.3 GW expected in Q4 alone

  • Net debt at INR 57,000 crores; operational debt INR 42,000-45,000 crores

  • Run rate EBITDA of INR 10,000 crores for current 11.6 GW; expected INR 15,000+ crores post 5 GW addition

Concerns

  • DOJ indictment of executives and potential impact on international funding

  • Massive Q4 catch-up of 4.3 GW needed to meet 5 GW FY25 target

Key financials

2 periods

Headline

  • Operational Capacity
    11.6 GW
    YoY +37%
  • Run Rate EBITDA (Current)
    ₹10,000 Cr
  • Expected Run Rate EBITDA (Post Addition)
    ₹15,000 Cr
  • Net Debt
    ₹57,000 Cr
  • Operational Debt
    ₹43,500 Cr
  • Normalized Interest Cost
    9.2%

9M

  • Revenue from Power Supply
    ₹6,829 Cr
    YoY +18%
  • EBITDA from Power Supply
    ₹6,366 Cr
    YoY +18%
  • Cash Profit
    ₹3,630 Cr
    YoY +23%

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

  • FY25 New Capacity Split
    85% Solar15% Wind
  • FY25 PPA vs Merchant (Solar)
    75% PPA25% Merchant
  • BESS Economics
    ₹1.35 Cr Capex9,000 cycles Cycles16 years Life

Guidance & targets

Capacity Addition

  • FY25 Target Capacity Addition · FY25 · High confidence ~5 GW (4.3 GW in Q4)
    we feel very strongly that we should be able to deliver approximately 5 gigawatt of new capacity this year

    — Amit Singh

Capacity

  • FY26 Growth Capacity · FY26 · Medium confidence 6-8 GW range
    we are looking to ramp up our existing run rate and not reduce it here

    — Amit Singh

Storage

  • PSP Completion Storage · FY30 · Medium confidence 5.5 GW by end of decade
    we have three projects in flight and we're expecting to complete them before the end of this decade to reach the 5.5 GW target

    — Amit Singh

Revenue Mix

  • PPA vs Merchant Split Revenue Mix · Long-term · Medium confidence 85% long-term PPA, 15% C&I/merchant
    We aim to have 85% of our contracts to be long-term fixed-term PPAs... approximately 15% of our capacity around C&I and merchant

    — Amit Singh

Risks & concerns

  • DOJ indictment of executives and potential impact on international funding

    high

    Management states AGEL is not party to litigation; domestic lenders unaffected; TotalEnergies relationship intact; no new equity needed from TotalEnergies

    Analyst downplayed

  • Massive Q4 catch-up of 4.3 GW needed to meet 5 GW FY25 target

    high

    Extended monsoon shifted construction S-curve right; some capacity may slip to early Q1 FY26 (4-5 weeks after year-end)

    Both acknowledged

  • Transmission connectivity delays across renewable sector

    medium

    Very visible delays in some areas; working with CTU, PGCIL; government monitoring closely; batteries as de-risking strategy

    Both acknowledged

  • Aggressive and irrational BESS tender pricing by non-serious players

    medium

    Management staying out of vanilla tenders; focusing on integrated solutions with above-market returns

    Both acknowledged

Areas of evasion (1)

  • Exact FY26 capacity guidance deferred to Q4

Q&A highlights

3 direct
BESS Strategy and Battery Economics Direct
capex of INR 1.3 to INR 1.4 crores per megawatt hour and cycles remain between 8,000 to 10,000 cycles... battery to last for 16 plus years

First time management provided detailed BESS economics, signaling serious commitment to battery storage alongside PSP

Asked by Bharani

Financing and DOJ Indictment Impact Direct
AGEL is not a party to the litigation... domestic lenders are more excited to work with us... no change in interest costs or terms

Critical question on financing resilience post-DOJ concerns; management provided strong reassurance on domestic funding access

Asked by Love Sharma

Transmission and Regulatory Headwinds Direct
in Khavda, we have very clear protection for the next three years of what transmission progress is... all the numbers we have shared are linked to that readiness

Addresses three key sector headwinds: grid connectivity delays, ALMM/ALCM restrictions, and DISCOM reluctance on PPA signing

Asked by Nikhil Nigania

1 min read 5 chapters

Detailed narrative

Q4 Catch-up and FY25 Capacity Target

AGEL is targeting 5 GW total for FY25, requiring 4.3 GW in Q4 alone after extended monsoon delayed Khavda construction. Management acknowledged some capacity may slip 4-5 weeks into early Q1 FY26 but reaffirmed the target. Workforce at Khavda has been expanded to 12,000+ people for accelerated execution.

BESS Strategy Unveiled

Management formally announced BESS as a strategic focus area alongside solar, wind, and PSP. Battery capex benchmarked at INR 1.3-1.4 crores/MWh with 8,000-10,000 cycles, 16+ year life, and 85% round-trip efficiency. Company will focus on integrated solutions (solar+BESS, RTC power) rather than vanilla standalone tenders. LFP chemistry preferred for utility scale.

PSP Portfolio and Timeline

Three PSP projects in flight targeting 5.5 GW by end of decade. Chitravathi (500 MW) expected by FY27. Tarali (1,500 MW) and Gandikota (1,800 MW) expected by FY28. These complement BESS for grid integration and voltage regulation.

Financing Resilience Post-DOJ

Despite DOJ indictment of individuals, AGEL reaffirmed strong domestic lender interest with no changes in terms or costs. Net debt stands at INR 57,000 crores with operational debt of INR 42-45K crores. The $1.06 billion construction facility refinancing is in advanced stage with domestic lenders. Normalized interest cost is 9-9.4%.

Revenue Mix and Market Strategy

Targeting 85% long-term PPAs and 15% C&I/merchant. FY25 new solar capacity is 75% PPA and 25% merchant; all wind is merchant. Strategy emphasizes integrated power solutions for data centers and C&I customers. Google partnership announced earlier. RPO obligations expected to drive DISCOM PPA signing.

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