Adani Enterprises Ltd. (NSE: ADANIENT) Q2 2025 Earnings Call dated Oct. 29, 2024
Corporate Participants:
Jugeshinder Singh — Chief Financial Officer
Analysts:
Aditya Bhartia — Analyst
Prateek Kumar — Analyst
Brett Knoblauch — Analyst
Gaurav Birmiwal — Analyst
Gopal N — Analyst
Veenit Pasad — Analyst
Nirav Shah — Analyst
Dhananjay Mishra — Analyst
Bhaskar Chakraborty — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the earnings call of Adani Enterprises Q2 FY ’25 Conference Call hosted by Investec Capital Services. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Aditya Bhartia. Thank you, and over to you, sir.
Aditya Bhartia — Analyst
Thanks, Bhargav. Good evening, everyone, and welcome to the Q2 FY ’25 earnings call of Adani Enterprises. We have the senior management of the company represented by Mr. Robbie Singh, CFO of any Enterprises; and Mr. Manan Vakharia, Investor Relations. I would like to welcome them and thank them for giving us the opportunity to host the call.
I would now hand the floor to Mr. Robbie Singh for opening now. Over to you, sir.
Jugeshinder Singh — Chief Financial Officer
Thank you. Good evening, everyone. We welcome you to the earnings call to discuss Adani Enterprises results announced today for the quarter and half year ended 30th September. Over the years, Adani Enterprise has focused on building utility and infra assets contributing to addressing logistics and energy transition challenges facing the country. AEL’s emerging core infra businesses under its incubation portfolio represented by Adani New Industries, our green hydrogen ecosystem, data center, airports and road businesses plus established business portfolio represented in primary industry vertical comprising mining services, metals and materials, commercial mining and industrials. This half year, AEL has recorded its highest ever EBITDA of INR8,654 crores.
The emerging core infra businesses recorded half year EBITDA of INR5,233 crores, which is an increase of 85% on a year-on-year basis. Total income of incubating businesses for first half ’25 increased sharply by over 63% to INR17,287 crores, with the profit before tax increasing by 138% to INR2,878 crores. The consistent higher contribution of these emerging core infra boosted the overall consolidated results for the first half. Consolidated EBITDA up by 47% to INR8,654 crores. Consolidated profit before tax up 137% to INR4,644 crores and consolidated income up 14% to INR49,263 crores.
Coming to the project and operational updates on major businesses. Adani New Industries wind manufacturing business continues on its development part, which has now crossed 300 blade production milestone during this quarter. The RLMM listing of 5.2 megawatt and 3-megawatt wind turbine is completed, and the further final certificate of 3.3-megawatt wind turbine is being applied for. In the electrolyzer businesses, we have received a letter of award for electrolyzer manufacturing facility of 101.5 megawatt per annum from SECI. With this, cumulative capacity awarded is 300-megawatt per annum. In the airport businesses, the growth in passenger movements has resulted in Adani Airports Holdings handling roughly 23% of India’s passenger movements.
During the quarter, we also tested the southern runway of Navi Mumbai airport with the landing by Air Force plane, and we expect the Air Force to be completed by early 2025. In this quarter, we added Six new routes, Six new airlines and 13 new flights across the seven operational airports. In the Roads businesses, we completed two more road projects, which now takes the completed projects to six with the remaining eight projects, including the greenfield Ganga Expressway progressing as per schedule. On the Roads and Data Center business, we’ll provide a much more detailed and comprehensive update along with the annual results in May. In the Mining Services portfolio, during the quarter, AEL received letter of award for development and operation of iron ore mine at Taldih with a capacity of seven million tonnes per annum in the state of Odisha.
AEL had signed an MDO agreement for coal mine at Dahegaon with Ambuja Cements in the state of Maharashtra. With these new mines, AEL’s MDO business is now nine coal blocks plus two iron ore blocks. During the quarter, total mining services dispatch was up by 32% to 8.2 million metric tons. Revenue increased by 64% to INR803 crores and EBITDA increased by 65% to INR400 crores on a year-on-year basis. In the Integrated Resource Management portfolio, the volume for current quarter stood at 13.7 million metric tons and the revenue from IRM business stood at INR9,697 crores and EBITDA maintained at INR927 crores. Under commercial mining, Carmichael mine production is now running at roughly 15 million metric tons per year with a shipment of about 3.8 million metric tons in the quarter.
We are now open for Q&A. Thank you.
Questions and Answers:
Operator
[Operator Instructions] The first question comes from Prateek Kumar from Jefferies. Please go-ahead.
Prateek Kumar
Hello. Yeah, good evening, sir, and congrats for good results. My first question is on your capex number. So first half capex has been like INR15,000 crores based on your balance sheet data. How are we looking at capex now for the full year because earlier we were anticipating a much larger capex for the full year. How are we looking at capex for the full year and segmental capex also, if you can provide that?
Jugeshinder Singh
The full year capex, I will go through various segments. So in New Industries, we expect the full year capex to be around INR28,000 crores. On the airport side, a number close to completing the Navi Mumbai airport included around INR16,000 crores. And we expect the roads to complete on schedule with the capex of around — roughly around INR12,000 crores. Small capex, but not a material number in relation to water projects. Data centers, we expect to complete roughly about INR5,000 crores. And then in the remainder of the businesses, we expect to complete the capex for further about INR5,000 crores.
Now the reason why this particular quarter and this half of the year is slightly slower than the remainder is because this, as you know, as in a capex -heavy business, there is a natural cyclicality in India due to monsoons. So during the monsoon period, the capex slows down and it will start ramping up now and reaches its peak in December, Jan, Feb, March and that peak then continues until May, and when the summer season starts, it starts winding down through to the monsoon.
And this year, the monsoon was about six to seven weeks longer than traditional. So we might be plus minus six weeks in terms of the schedule, but we expect to — if you see our sort of operational update of June 2025, you will see that broadly the capex numbers will be in line.
Prateek Kumar
So broadly, still we are looking at INR70,000 crores capex for this year, sum of the numbers, sir?
Jugeshinder Singh
I would say closer to roughly INR67,000 crores.
Prateek Kumar
And sir, regarding the ANIL segment — ANIL Energy segment, can you also lay out the time line of projects like backfill integration? What is capacity expansion? Where we are? And when do we take a look at the pilot project for green hydrogen and electrolyzer?
Jugeshinder Singh
Like I said, what we can highlight overall is that the manufacturing, with the exception of foundry, is now practically up and running. So from ingot wafer onwards, plus the ancillary industries are now fully integrated, which is glass, back sheet, PVA, aluminum frames. So that aspect for cell and module is complete. Wind turbine is also from blade, nacelle assembly, part of that work is already complete.
Electrolyzer, we have started the work and we expect to give you an update as to how that
Work is proceeding in terms of construction and development of the electrolyzer facility by March next year. There, we are pretty much on the site, development site, development work, site civil planning work for where the generation capacity of solar and wind will go has also commenced, and we’ll have a more detailed update towards the middle of next year.
The downstream product work development, probably we will be able to give an update in the next 24 months, but we will have a much more detailed update in relation to the first few phases of manufacturing and the green power generation for green hydrogen in the middle of the next year.
Prateek Kumar
Okay. So the capital employed for the ANIL segment currently appears very less, probably at around INR3,000 crores to INR4,000 crores and we are looking to do INR28,000 crores capex in this year. So this is going towards the expansion, to capacity, to what number, that’s what I was asking in terms of milestones, in terms of capacity targets.
Jugeshinder Singh
No, what you are referring to is the manufacturing capex only. You’re not referring — Adani green hydrogen business, we have three types — four types of capex. The manufacturing ecosystem capex, which you are referring to, then the green hydrogen development capex, then the electrolyzer capex, which is electrolyzer on site, that’s not the manufacturing, and then the downstream capex of the downstream plots.
So there is a full fledged S-curve as to how we see that develop over a period of time. What you are noticing now is a stable development. So the capex number will start ramping up, as I said, over the next year as we go through this development phase. So currently, the focus has been to integrate the manufacturing ecosystem that is required to start the green electron production for the green molecule production.
Prateek Kumar
And can you also talk about the Airport segment, how are we — because now the Navi Mumbai airport is nearing completion, how are we looking at airlines addition or the start of flights from that airport by March ’25 and the city side development projects, which were supposed to develop, like three airports to start with.
Jugeshinder Singh
You know the first phase of the city side development at Ahmedabad is underway. We have one more airport will start. Navi Mumbai airport should click in, like you rightly pointed out, the second calendar quarter of the next year. The airline addition planning continues — this time also, we reported, this quarter, we also reported six new airlines. There, various airports are starting. That will continue to develop. We expect the first of our pure city side development to come online by 2026.
The intermodal development at Ahmedabad is already up and running, which is intermodal meaning where passengers and non-passenger can mix. And similarly, in Navi Mumbai, it will also be ready. The intermodal development will be ready as soon as the terminal is ready. The city side development there also will be a little bit longer.But overall, we expect to have the city side development in sufficiently large numbers that it shows up in our EBITDA by end of 2026. The other aspect of airports is the development of its JV businesses, which are ancillary business in there, so that is also going as planned.
Prateek Kumar
Thank you, sir. I’ll hand back to you.
Jugeshinder Singh
Thanks.
Operator
Thank you. [Operator Instructions] Next questions comes from Brett Knoblauch from Cantor Fitzgerald. Please go-ahead.
Brett Knoblauch
Hi guys thanks for taking my question and Congrats on the quarter. Can you maybe just help us understand your data center business and what you guys are seeing there in terms of pipeline and demand. I know, obviously, a big trend around the world is AI and new high-performance compute centers. Do you guys have any plans to build data centers to support all the higher density chips in India anything that is coming to market? And have you had any kind of talks surrounding that?
Jugeshinder Singh
Yes. We are geared, Brett, to — for our data center business to — in the ultra hyperscale data center in the AI space and also in the GPU space. We will actually make a comprehensive data center as a showcase presentation in as part of our annual results in May next year. It will be much more appropriate to go through at that time. But suffice to say, we are fully geared up for that, both from energy supply point of view, from land from other connectivities and civil infrastructure point of view for the AI data center.
Brett Knoblauch
And as you are thinking about the incubating businesses and maybe new businesses to come, would getting in to anywhere on the AI supply chain or that market be interesting to you guys?
Jugeshinder Singh
Not the AI supply chain, but we have two large service businesses within AEL, which is our Adani Digital Labs and our global capability center. The digital infrastructure rollout and consequently, development of smart systems across those two businesses is a big drive internally for us because we don’t report them separately at the moment because they are emerging businesses.
Our focus in the first phase over the next five years is to focus on the integration of airports, green hydrogen and the roads business plus data centers. So we will actually over the next — as we go through this development phase of our services infra — digital infrastructure services businesses, we will be outlining them in more detail. But I expect that currently, it’s more of our R&D type of expenditure investment. We expect to provide full briefings on the development of our services businesses in a meaningful way probably towards the end of this decade when they reach certain scale.
Operator
Thank you. The next question comes from Gaurav Birmiwal from Axis Mutual Funds. Please go-ahead.
Gaurav Birmiwal
Hello, sir. Thank you for the opportunity. I just wanted your thoughts on the external market outlook for the sales of our solar panels as well as the entire order book for NGT — that we are manufacturing my question, sorry.
Jugeshinder Singh
That demand remains relatively stable. I think over a period of time, we expect this capacity to actually — our installed capacity itself to double. But that would mean our own green hydrogen ecosystem demand will also ramp up. There’s no specific market shift that we can see in the short term, but over the medium term in manufacturing and in export industries, you can have market shifts. But as we mature this segment in relation to the scale at which Adani Green is operating and the scale at which Adani New Industries will operate, I think the manufacturing system itself will to remain immune to outside market risks in the medium term, given how it is situated and given the scale at which the various sister firms at the group in this area are developing. Thank you. And Gaurav, sir you have any other follow-up questions.
Gaurav Birmiwal
Thank you.
Operator
Thank you.[Operator Instructions] The next question comes from Gopal N from SBI Life Insurance. Please go-ahead.
Gopal N
Hi, sir. Thanks for the opportunity. My question was on, there is sequential moderation on the segment wise EBITDA on ANIL. So can you just give some update on that, why it is so?
Jugeshinder Singh
I think as I mentioned, if you recall, I don’t know whether you were on the call or not in March. Sometimes we have order spillovers, which would come after the balance date, which was in the first quarter. So the order book is now tracking at about one gigawatts — just over one gigawatts, 1.1 gigawatts and capacity is 4.5 gigawatts. So we are pretty much running at capacity for the quarter. So last year — last quarter, you saw, it was 1.3 gigawatts, that was largely driven by sales recorded in the first quarter of which were produced previous quarter.
Gopal N
And this should be the run rate for the remaining part of the year?
Jugeshinder Singh
Yes. We have about 4.5 gigawatts capacity, so we’ll run at close to about 1.1 gigawatts, 1.2 gigawatts.
Gopal N
And there is no change in the export market in terms of demand and…
Jugeshinder Singh
No, it pretty steady.
Gopal N
Okay. Sir, on this road assets EBITDA, so there is an improvement in quarter-on-quarter and year-on-year. In terms of revenue, sequentially, there is no change. So what is driving this change, sir?
Jugeshinder Singh
That’s largely because of achieving the commercial operations on the two road projects.
Gopal N
Okay. But there is no change in the revenues sequentially.
Jugeshinder Singh
That is just an accounting artifact. The EBITDA number is now recorded because COD has been achieved. So the revenue number was recorded, but because of the COD achievement, we recorded the EBITDA into the accounting now.
Gopal N
And the last bit was on interest on P&L. There is a drop sequentially and year-on-year also whereas we have seen net debt going up. So how should we see it, sir?
Jugeshinder Singh
I think you should — from a practical aspect, you should assume that the interest will remain steady and slightly rise as our — as the businesses are — our constituent businesses are experiencing. This particular time what can happen is that we do have FX-based borrowings, so there was some FX gain that is reflected in the rates.
Gopal N
Okay. Can you quantify that amount?
Jugeshinder Singh
Approximately INR200 crores.
Gopal N
Okay. So that INR1,100 crores, INR1,150 crores run rate should be there?
Jugeshinder Singh
Yes, yes.
Gopal N
Okay. Great, sir. Thanks a lot for answering the question.
Operator
Thank you. The next question comes from Mr. Aditya Bhartia. Please go-ahead, sir. Thank you, sir, your line is unmuted. Please proceed with your question.
Aditya Bhartia
Hello, sir. My first question is on capex in ANIL. How much capex are we envisaging for the next three years? And how would you broadly split this capex into the four categories that you mentioned, manufacturing, green hydrogen development, on site electrolyzer and downstream capex?
Jugeshinder Singh
I think we — because we — how we see the — broadly we have a tighter range on, let’s say, the next two years. So I don’t want to give a number that could be out materially in terms of focus. We expect that we would have a capex this year included plus the next year roughly around the INR56,000 crore mark. Of this, majority you can assume that about 60% of this or maybe slightly higher than 60% of this will be in the generation of the green electron. And downstream initially will be less, but could be closer to about, say, INR4,000 crores, bbut that can shift to a year later depending upon how the schedule is going.
Aditya Bhartia
And sir, my second question is on the media articles that are being there about Adani Enterprises looking to acquire ITD Cementation. Just wanted to understand what’s the rationale of exploring buying a construction company?
Jugeshinder Singh
AEL is not doing that at all. It’s a wrong media article because that is we have — as if you see, roughly, I think, it’s on the third page of our presentation, every presentation we have, there is a company called Adani India Infra Limited sic Adani Infra india Limited, which covers construction and assurance on, that is the entity that is buying this construction because they need to develop their construction ecosystem, given our capex rise and because they provide the construction assurance to various group companies. And so they are continuing to enhance their ecosystem and build their capability.
Aditya Bhartia
Understood, sir. Understood. That’s helpful. Thank you so much, sir.
Operator
Thank you. [Operator Instructions] The next question comes from Veenit Pasad from Investec. Please go-ahead.
Veenit Pasad
Good evening, sir. Just a couple of questions. Firstly, we were ramping up on the wafer capacity until last quarter, so how has that shaped up? Has the plant actually stabilized out there?
Jugeshinder Singh
The wafer plant, it is basically at a point where — as we started the first wafer production, we expect it to complete stabilization phase over the next three months, and then it will start ramping up to its capacity over the next 12 months after that from January onwards.
Veenit Pasad
Understood. And on the IRM and the mining side of things, how do you expect volume trends there for the remainder of the year?
Jugeshinder Singh
Flat to maybe slightly increasing.
Veenit Pasad
Understood. Okay. Okay. Thank you so much.
Operator
Thank you. The next question comes from Nirav Shah from Geecee Holdings. Please go-ahead.
Nirav Shah
Yeah, good afternoon, sir. And Congrats on a very good set of numbers. So a few questions. First is on the airport side. I mean, for our six PPP airports, sir, can you just elaborate on the time lines for the tariff increase because that has been approved, but it has not been effective. So will we see all the tariff increases in place by end of the year? Or I mean, if you just can give the time lines, please, that would be helpful.
Jugeshinder Singh
The order was received last quarter, and it will start showing up in the numbers from first quarter — last quarter of this financial year and first quarter — calendar quarter next year.
Nirav Shah
So all six airports tariff increase will be between January to June?
Jugeshinder Singh
There are three airports in the first and then three will start from about middle next year.
Nirav Shah
Middle of next year, perfect. And sir, second question is just on the book keeping side. I mean, if you can just share the EBITDA numbers for the Australian coal mines and the split in the ANIL manufacture ecosystem between wind and solar?
Jugeshinder Singh
See, Australia EBITDA is INR784 crores.
Nirav Shah
Okay, INR784 crores. That’s a sharp increase compared to last quarter from INR300 crores to INR784 crores. And sir, how much did we make in the wind ecosystem?
Jugeshinder Singh
Wind EBITDA is roughly just about 8% of the total ANIL ecosystem EBITDA, which is half yearly. So about 8% is wind and 92% is the solar manufacturing.
Nirav Shah
This is for first half or second quarter, sir?
Jugeshinder Singh
First half.
Nirav Shah
First half, okay. On our guidance for MDO operations, so we had earlier given a guidance of 45 million tonnes for ’25 and 55 million tonnes for ’26. And Carmichael saw consequently 12 million tonnes in this year and 15 million tonnes next year. So is it largely — are we making that guidance or there isn’t change to it because we’ve added a couple of projects.
Jugeshinder Singh
No, Carmichael we are maintaining and MDO will be closer to 40 million tonnes instead of 45 million tonnes.
Nirav Shah
Okay, for this year. But next year should be largely same, 55 million tonnes?
Jugeshinder Singh
Next year would be just around 50 million tonnes plus/minus, say, 4% to 5%.
Veenit Pasad
Got it, sir. Got it. Great. Thanks, sir and all the best, sir. Thank you.
Jugeshinder Singh
Thanks.
Operator
Thank you. The next question comes from Prateek Kumar from Jefferies. Please go-ahead.
Jugeshinder Singh
MR. Kumar, your line is unmuted. Please proceed with your question.
Prateek Kumar
Yeah, sorry. Thanks for the opportunity. I have three follow-up questions. Firstly, on airports. In international business, there’s quite a list around reforming like subsidiaries in national business whether for airports concession or for duty-free or other businesses. So can you just explain are we looking at international airport business, where are we, how much capex we’re looking at in this segment?
Jugeshinder Singh
International airports will not be a material part of anything that we do in the medium term. Main focus remains on India, and so it’s not a material number. For the subsidiary formation relates to the fact that within Adani Airports, we have a very large emerging business in relation to duty free. So that’s more consolidating the purchasing entity in one location, so that we can streamline the duty-free business. And duty-free business itself also operates duty-free stores outside of our airports as well. So it has its own business plan. If there’s anything specific on that, it’s not a major capex business, more of a concession business. So there’s no capex impact on this, but there is business of duty-free, which will develop outside of India as well.
Prateek Kumar
Okay. It also includes management of inventory we’re buying of all products whether it’s to sell in India or abroad, that also part of this business only?
Jugeshinder Singh
Of the duty-free, yes.
Prateek Kumar
Other question is on the copper business. So copper, we like sort of started around six months back. How are the revenues and EBITDA of that segment, maybe for FY ’25 expectations or it’s maybe one — how is this 1H?
Jugeshinder Singh
First time, meaningfully copper will appear in our numbers is the last quarter of this year. And then over the following 12 months, you will actually start seeing that in our Metals and Materials business because it will actually produce significant EBITDA and cash flow.
Prateek Kumar
Okay. And lastly on coal to PVC, is there an update on where we are within that project, if we’re looking at December 26th commissioning and EBITDA of INR4,000 crores in that business?
Jugeshinder Singh
December 26 is the date. You can always have like, say, maximum plus six weeks or seven weeks due to timing of monsoon, etc, but we are on schedule.
Prateek Kumar
Okay. One more question. On wafer capacity, we have talked about scaling our module and cell capacity to 10 gigawatts in next two years. But on paper, we have not talked about moving from two gigawatts. Is this now sort of move to like later years? So how are we looking there?
Jugeshinder Singh
No, no. Capacity rise is in synchronization with each other. As we move further up and we stabilize the existing wafer, we will continue to rise. Then the second part of it is, capex is relatively straightforward because all of the ecosystem would have developed by that time. We haven’t specifically — you’re correct, we haven’t specifically talked about it, but I just want to clarify for everybody that the overall 10 gigawatt capacity will be done in synchronization. In fact, glass, battery, TBAs, aluminum frames, etc. The entire ecosystem will support a 10 gigawatt capacity.
Prateek Kumar
And that is expected by like FY ’27 or ’28 or like what period?
Jugeshinder Singh
Closer to ’28.
Prateek Kumar
Thank you.
Operator
Thank you. The next question comes from Dhananjay Mishra from Sunidhi Securities. Please go-ahead.
Dhananjay Mishra
Yeah, hello, Sir, you said in ANIL ecosystem, we will be doing capex close to INR70,000 crores this year or next year and 60% will go for the generation part. So in terms of putting up solar power capacity or windfall capacity, so what kind of capex and how are placed in terms of using capex from that side?
Operator
Ladies and gentlemen, we have the line for the management reconnected. Please go ahead, sir.
Dhananjay Mishra
Should I repeat my question once again?
Operator
Yes, sir, please.
Dhananjay Mishra
I was asking about this generation part of the thing. So for hydrogen generation, eventually we will be utilizing solar power and wind power, which we have said. So how we are placed in terms of what kind of a capex we are envisaging for next year in that segment?
Jugeshinder Singh
Next year, capex, in the generation segment, total, what we have to build over a period of time, whether it starts next year or it rolls out even a year after that because once it starts, it adds quickly, but we expect that over the next two years, the wind and solar generation capex to be in the order of around INR33,000 crores, INR34,000 crores.
Dhananjay Mishra
And what kind of capacity we are going to put in that in terms of overall capacity in solar and wind power by, let’s say, FY ’27?
Jugeshinder Singh
That would be roughly about basically close to about seven gigawatt.
Dhananjay Mishra
Okay thank you.
Operator
Thank you. The next question comes from Bhaskar Chakraborty from Jefferies. Please go-ahead.
Bhaskar Chakraborty
Thank you very much. Could you share the revenues from WTP sales during 2Q ’25?
Jugeshinder Singh
Sorry, revenue from?
Bhaskar Chakraborty
The WTP sales?
Jugeshinder Singh
Roughly INR1,000 crores.
Bhaskar Chakraborty
In this quarter or the first half?
Jugeshinder Singh
No, first half.
Bhaskar Chakraborty
And during this quarter, please?
Jugeshinder Singh
INR300 crores.
Operator
[Operator Instructions] As there are no further questions, I would now like to hand the conference over to the management for closing comments.
Jugeshinder Singh
I just want to firstly just thank Investec for organizing the call, and for the participants who asked us the questions and the participants who attended the call, thank you so much. And we will — if there are anything further, you can please reach out to Investec and then we will respond via Investec. Thank you.
Operator
[Operator Closing Remarks]