ADANIENSOL Q2 FY27 Earnings Call: Order Book Hits Rs. 87,000 Crore, Record H1 Capex of Rs. 7,850 Crore

Record Capex and Broad-Based Growth Across Businesses

• Total income grew over 50%, EBITDA rose close to 67% and PAT grew 145% — Q2 FY 2026-2027 growth rates cited by management in opening remarks.
• Capex deployment of Rs.7,850 crore in H1 FY 2026-2027 — an all-time high, spread across all businesses.
• Asset base stands at Rs.83,000 crore — with over Rs.1 lakh crore of capex already logged, to be delivered over the next 4-5 years; management expects the asset base to grow 1.3-1.4x over the next 5 years.
• Mumbai distribution losses (AEML) reduced to 4.29% in H1 FY 2026-2027 — despite consumption rising over 10%; AEML and MUL continue to focus on reliability and customer service.
• Energy solutions platform delivered revenue of over Rs.2,000 crore and EBITDA of over Rs.800 crore in Q2 FY 2026-2027 — transitioning from incubation to scale.
• Ranked #1 globally in S&P Global's electric utility category with a score of 90/100 — vs an industry average of ~40.
• Q2 P&L included recognition of past paid MAT assets of ~Rs.1,500 crore at MEG PTCL and ATIL — following their switch to the new tax regime; as Section 62 assets, a corresponding adjustable recoverable liability was created, resulting in no P&L impact.

Rs.87,000 Crore Order Book, But ROW Delays Stall Commissioning

• Transmission order book (work-in-hand) stands at ~Rs.87,000 crore (Rs.870 billion) as of Q2 FY 2026-2027 — includes the recently won Vizag (Panduthi) and Satara projects; both are interstate, per CEO Kandarp Patel, correcting an analyst's premise.
• H1 FY 2026-2027 saw no meaningful transmission commissioning due to ROW issues and clearances — including Khavda capacity; Halvad is stalled on ROW, with the matter discussed frequently at the Government of Gujarat and Government of India level; management expects resolution "very soon."
• FY 2026-2027 commissioning guidance — WRSR, Khavda Phase 4 and Halvad are the "sure shot" projects; Navinal may commission in FY 2026-2027 or spill into H1 FY 2027-2028; Mahan Phase 1 in FY 2026-2027, Mahan Phase 2 in Q1 FY 2027-2028.
• Country-level tendered transmission pipeline stands at ~Rs.1,40,000 crore as of Q2 FY 2026-2027 — spread across state and central tenders with a tilt toward the Center (including several HVDCs); the interstate/intrastate breakup remains evolving.
• Government of India recently approved a mega east-to-north transmission corridor valued at more than Rs.80,000 crore — cited by management as evidence of broadening transmission opportunity.
• Management cited a pipeline of >100 GW of thermal capacity coming up (period unspecified) — CEO Kandarp Patel rejected the premise that brownfield expansion shrinks the transmission pipeline, noting large-scale brownfield additions (illustrative two units ≈ 1,600 MW) will require HVDC-class solutions rather than only 400 kV lines.
• Mumbai city consumption is up 11-12% in FY 2026-2027 — which management says will push the need for additional transmission capacity around city areas; management expects directionally more new project opportunities from the state side.

Merchant Margins Elevated; Deliberate Pivot to Long-Term PPAs

• Q2 FY 2026-2027 energy solutions volumes were 14,583 million units (H1: 28,540 million units) — correcting the analyst's ~12 BU impression for the quarter; breakup: ~3,500 MU from proprietary positions backed by long-term supply tie-ups, ~9,500 MU traded on behalf of counterparties, ~1,500 MU power management services.
• ~3.5 billion units of Q2 FY 2026-2027 volumes were merchant, earning an EBITDA margin of Rs.1.70-2 per unit — versus ~2-3 paisa per unit on non-merchant trading volumes; average trading realization is Rs.5.75/unit (H1 FY 2026-2027).
• Management attributed elevated merchant margins to market conditions prevalent in H1 FY 2026-2027 — and said it does not want quarter-to-quarter volatility; long-term tie-ups will be secured at a consistent 80 paisa-1 rupee spread (period unspecified).
• 3.25 GW of PPAs signed on the energy trading platform as of Q2 FY 2026-2027 — 2.5 GW with MSEDCL and 750 MW with AEML; margins on these will be below current elevated merchant levels but not as low as regulated returns.
• Targeting total aggregate capacity tie-ups on both sides of about 7,000-8,000 MW over the next 3-4 years — per CEO Kandarp Patel; the 7,000-8,000 MW target refers to the consumer stack (power sales/demand) side, with sourcing capacity required above that level.
• Supply tie-up mix: the 4.6 GW power tie-up and 3.5 GW battery storage are predominantly sourced from Adani Green — with ~650-700 MW from third parties; management confirmed there is no tie-up with Adani Power as of the Q2 FY 2026-2027 call.
• Merchant run-rate of ~3,500 million units per quarter affirmed (period unspecified, until long-term PPAs are tied up) — consistent with the analyst's 13-14 billion units annualized estimate; wind/solar seasonality flagged as a swing factor.

MSEDCL and AEML PPAs: Timelines, Sourcing and Curtailment

• MSEDCL 2.5 GW deployment schedule — 1,000 MW from end-February FY 2026-2027, another 1,000 MW from end-April FY 2027-2028, and 500 MW by end-July FY 2027-2028; ~1,000 MW of MSCD supply starts towards end of February (Q4 FY 2026-2027), absorbing part of merchant volumes.
• The 750 MW AEML PPA has been approved by the regulator with all processes complete — management expects execution over the next 3-4 weeks, with capacity deployable over 2 years from the date of signing.
• Take-or-pay contracts with Adani Green place curtailment risk on the generator, not AESL — CEO Kandarp Patel clarified AESL's obligation begins only once power is scheduled; volumes not scheduled due to enforced grid curtailment remain Adani Green's business risk.
• MSEDCL PPA carries no thermal compulsion — described as an energy supply contract permitting any generation combination; management confirmed some thermal capacity will be required for round-the-clock supply and is exploring long-term options including Badani Power and third-party thermal PPAs.
• Thermal quantum for the MSEDCL PPA cannot be quantified at this point — management is deliberately not locking in capacity to retain supply-side flexibility; roughly 50% of sourcing for the 2,500 MW Maharashtra PPA was covered as of Q2 FY 2026-2027 (across all sources, not only battery storage).
• Adani Green battery tie-ups: AESL is in active discussions with multiple parties, including Adani Green — with some tie-ups possible in the near future, but "purely on market benchmarks"; management declined to anchor to the Rs.4.85 tariff referenced by the analyst, noting pricing could be higher or lower depending on market cost movements.

14.8 Million Meters Delivered; FY27 Installation Guidance Reset

• 14.8 million meters delivered cumulatively as of Q2 FY 2026-2027 — ~60% of the order book; management intends to complete the balance in another 12-14 months.
• 3.4 million installations completed in H1 FY 2026-2027 against earlier guidance of 10 million for FY 2026-2027 — management now plans 80-90 lakh meters in FY 2026-2027, with the balance 40-45 lakh hoped to be completed in H2 FY 2026-2027; a notable shortfall vs the original 10 million guidance.
• Market remains largely untapped for large-capacity auctions — the company is participating in current auctions and is fully positioned to tap the opportunity as the market ramps on demonstrated benefits.
• CEO Kandarp Patel said there could also be an acquisition opportunity in the smart metering market — on top of wins through bidding (timeline unspecified).

Rs.18,000-19,000 Crore FY28 Transmission Capex; Hedged Debt Base

• Transmission capex guided at Rs.18,000-19,000 crore in FY 2027-2028 — with additional capex expected in H2 FY 2026-2027 (amount not fully captured in transcript); management is not revising the Rs.15,000 crore FY 2026-2027 capitalization guidance for now.
• FY 2026-2027 transmission capitalization (gross block additions) guided at Rs.8,000-9,000 crore — with WRSR Khavda Phase 3, Halvad and Khavda Phase 4 alone contributing close to Rs.9,000 crore; FY 2027-2028 capitalization guided at ~Rs.10,000 crore, jumping in years beyond FY 2027-2028 as HVDC projects commission in lump.
• Debt mix: ECBs are ~10% of overall debt of Rs.51,000 crore (per CEO) — the analyst cited total net debt of ~Rs.41,000 crore; all USD bonds and ECBs carry fixed interest rates, with 75-80% of the debt portfolio on fixed coupon and currency hedged for FY 2026-2027.
• Management does not expect material P&L or balance-sheet volatility from FX or interest rate movements — given the fixed-rate/hedged structure.
• Intrastate project ROEs are typically a little better than interstate — per the CEO, given the state vs. central regulatory landscape (no quantification provided).
• Opportunity pipeline remains robust across transmission, distribution, smart metering and C&I — management framed transmission as a market where the company can decide how much opportunity to tap, rather than one with any dearth of opportunity; Morgan Stanley's Vivek Rajamani flagged whether merchant earnings could soften in cooler periods as new contracts scale from 4Q of 2027 into FY 2027-2028; management's response focused on the merchant-to-PPA transition strategy.