Adani Energy Solutions Limited (ADANIENSOL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Q2 and 1H FY '26 Earnings Conference Call hosted by Adani Energy Solutions Limited. From the AESL side, we have the following on the call as main speakers: Mr. Kandarp Patel, CEO, AESL; Mr. Kunjal Mehta, CFO, AESL; Mr. Kapil Sharma, Business Head Transmission; Mr. Pushpendra Zala, Business Head, Smart Metering; Mr. Bhaskar Sarkar, Business Head, Cooling Solutions; Mr. Anupam Misra, Head, Group Corporate Finance; Mr. Vijil Jain, Head IR, AESL. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Vijil Jain from AESL. Thank you, and over to you, Mr. Jain.

Thank you so much. Hello, everyone. A warm welcome to the quarter 2 FY '26 call. I hope you got a chance to go through the earnings material, which was uploaded on the website and was also sent personally. Just to explain the flow of the call, we will start with an opening statement from the CEO, followed by questions and answers and of course, closing remarks from the CFO. In case you have any questions, please feel free to start joining in the question queue so that we can better manage the Q&A. Thank you, and over to you, K.P. sir, for the opening statement.

Good morning, and thank you to all investors and analysts for joining this Q2 call of Adani Energy Solutions Limited. Before I hand over to Kunjal for giving a quarterly operational and financial update and half yearly update, I wanted to touch upon 2, 3 points, important points. Those are essentially in relation to outlook, market business and sector outlook. So we currently have about INR 60,000 crores of order pipeline for transmission project. Similarly, we have total INR 26,000 crores of revenue and INR 14,000 crores of CapEx of smart metering. And distribution, we do every year about INR 1,600 crores to INR 1,800 crores of CapEx. In the first half, you might not have seen very significant uptick in EBITDA, though it's a fairly good number. But the major contribution will come from second half because we are poised to commission at least 3 transmission projects, which will be of the order of INR 12,000 crores. Similarly, we will do the CapEx in distribution. Normally, distribution CapEx happens in second quarter. So you'll see a lot of movement in distribution CapEx as well. And that gets capitalized immediately because that's the nature of CapEx in -- it's basically a maintenance CapEx. Similarly, in smart metering, we have gathered a good amount of momentum. We have so far installed about 42.5 lakh meters in the first half, and we will cross 1 crore meter installation by end of the year. So all in all, about -- we will capitalize about INR 17,000 crores to INR 18,000 crores of CapEx, which will contribute about INR 2,800 crores of EBITDA on an annual basis. So you will see those numbers flowing in next half year. And similar kind of numbers will continue with growth every year for at least 3, 4 years basis the order pipeline that we have. The other important thing that I wanted to highlight was there are 2 exceptional items in the financials. One, last year, we had Dahanu. So when you compare the distribution business profitability and EBITDA, Dahanu was included. This year, it is not there. The contribution of Dahanu EBITDA was about INR 92 crores. Similarly, in AESL profit, there was a onetime exceptional item last year of deferred tax of about INR 314 crores, which is not in the current first half. So when you compare, you kindly take care of that detail as well. Over to you, Kunjal.

Sure. So just giving you certain key highlights of the business for the quarter 2 or for the first half year, followed by certain key updates on the financial front. So in the first half of FY 2026, we successfully commissioned 3 transmission projects, which is Khavda Phase II, Part A, Khavda Pooling Station, which is which we call as KPS-1 Pooling Station and the Sangod transmission line. All these 3 were completed during the first half. With the recent project wins, now the company has a transmission ordering construction pipeline at about INR 60,000-odd crores and with a smart meter order book of INR 2.46 crores, which has a revenue potential of INR 29,000 crores. On smart meter business, our installation or deployment of the smart metering continues. And today, now we have reached a total of 73 lakh meters, which have been installed. Our Mumbai utility, that is AEML continues to generate surplus. And basis that surplus, we continue to delever the balance sheet of AEML. During the last quarter, we bought back $44 million of the USD dollar bonds. This is in line with our continued -- our efforts to reduce our cost of capital and increase the debt maturity, which is currently 7.5 years. On the CapEx front, we have delivered a consolidated CapEx of INR 5,976 crores in the first half, which is 1.4% increase over the previous financial year. Further, on the O&M part of the transmission business, our availability continues to be very robust, which is 99.7 percentage in the first half year and basis which we have earned an incentive income of INR 30 crores in the Q2 and INR 59 crores in the first year, which is in line with what we have always earned basis the availability parameters in the transmission business. In the distribution business, our distribution losses in AEML continues to be the best-in-class, and we have reported the lowest distribution loss of 4.30% in the first half of FY 2026. Because of the prolonged monsoon in the city of Mumbai, the energy sales or the energy consumption has had a modest increase of 2 percentage over the previous year. In the C&I business, that business continues to provide power solutions to various consumers. Today, both our Adani portfolio companies as well as with the external consumers, we an aggregate load demand of currently of around 717 megawatts, which we are going to service to the C&I consumers. Similarly, our cooling solutions also is getting some traction, whereby we are deploying India's largest district cooling facility in the Mundra region. And we are also supplying to the -- or deploying cooling solutions for our various external consumers. We are currently totally implementing about 88,000 tons of refrigeration in the cooling capacity. In terms of the financial update, -- the total income rose to INR 13,793 crores, which is a 16 percentage growth over the previous half year, largely due to stable operating performance in transmission and the distribution business and the increasing contribution from the smart meter business. Our total EBITDA, that is the consolidated EBITDA has increased to INR 4,144 crores, which is a 13% increase on a year-on-year basis. Our consolidated PBT has grown to INR 1,404 crores, which is 34% increase over the previous year. If you adjust the onetime MAT credit or the reversal of the deferred tax liability, which was there in the previous year, which is of about INR 314 crores, our adjusted PAT has grown to INR 557 crores or INR 1,096 crores for the first half year, which is a 42% increase over the previous financial year. So I would repeat is that if you exclude the onetime deferred tax reversal or the MAT credit reversal, which was there in the previous year, our adjusted PAT has grown 42% in the first half to INR 1,096 crores. I thought that's the key things which is there. So in terms of the business outlook, the sector continues to present strong growth potential. Both in the transmission business as well as in the distribution business, backed by stable regulatory regimes and the continuous reforms that we are seeing in the sector. I'll pause here in case we can now open the floor for the Q&A from everyone.

[Operator Instructions] The first question comes from the line of Mohit with ICICI Securities.

My first question is on the transmission pipeline. I think you mentioned INR 96,000 crores in the press release. Does it include both the HVDC, Khavda-Olpad, and there is one South Kalamb or this is excluding both these HVDCs?

So, it is excluding Olpad, but including South Kalamb.

And sir, any update on the Olpad which you would like to share? What is the status?

So Olpad reverse auction happened. We were L1 and we are expecting a response from the PFC. So, probably the delay was because of holidays, but now we can expect a response from the PFC in the current week.

Okay, understood. So, my second question is on the smart meter. I think last year, there had been no bidding in the first half, right? And there was one Tamil Nadu bid which was pending. And also in the press release, you're talking about 104 million smart meters, which is still pending. So, have you seen any improvement in the tender bidding, or are there any other bid apart from Tamil Nadu which is up for tendering? And what is the status of Tamil Nadu bid?

So, Tamil Nadu bid submission was concluded. The technical evaluation is going on. The other bids, especially Telangana and Karnataka, because they will have to get their metering program approved under RDSS. Earlier, they never submitted that proposal. I believe that they have now submitted it, and it is under approval. So, the moment that approval comes in, then they will come out with a bidding.

So, is it right to understand that earlier, Karnataka was trying to do something on their own, and now they are trying to get it under RDSS? Is that right?

Correct, correct.

Understood. My last question is on the commissioning pipeline for transmission. I think we're expecting, especially HVDC, to get commissioned by October. Are you facing some kind of constraint or some kind of issues in general in the industry, maybe right of way, etc? Can you just throw some light on that?

So, the right of way and ability of skilled manpower is the problem. But as I explained in the last call as well, we do a little different approach as far as the right of way is concerned. While we use the government machinery and the power available under Sections 68 and 164, but we also directly negotiate with the farmer or landowner, and we run that process parallelly. As far as the manpower is concerned, so now we have developed that kind of relationship with those EPC players. You must have seen that we work with a few chosen EPC players. And this year, we have taken a very unique initiative. We have started our training facility. It is going online from 1st of November this year. we'll be training about 1,200 people for transmission line erection. And with that, all our requirements should be met. In fact, we will train those people and give it to our EPC partners.

Understood, sir. Any clue on the HVDC project commissioning date, sir, time line? Is it December '25?

So yes, HVDC is all going perfectly all right? All approvals are there, all the ROW issues sorted out. The critical work which is going on is underground cabling on that Vashi Creek, and we expect that to get commissioned somewhere in December or January.

Next question comes from the line of Manish Somaiya with Cantor Fitzgerald.

Can you hear me okay? A couple of questions, K.P. and Kunjal. Can you elaborate on parallel licensing opportunities beyond Mumbai? What circles are you targeting? And what's the competitive landscape? That's question number one.

Yes. So Manish, we, as AESL are open for both the routes of expanding into distribution, which is either privatization or parallel license. We applied for parallel license for Navi Mumbai, Mundra area. as well as Ghaziabad or Jewar in UP. The regulatory process for Navi Mumbai and Mundra part is over. We are expecting order from regulatory commission very soon because all those proceeding has been done. So we expect some movement on parallel license from these 2 geographies. And as far as competition in the parallel license is concerned, so parallel license is open for anyone. But in Mundra, nobody else has applied in Navi Mumbai. The other players have also applied, but the process has just initiated. And practically, I believe that once you have 2 distribution companies, I think interest by a third distribution company will reduce significantly in particular geography.

Okay. That's helpful. And then just turning to smart metering. I did see that the installation rate was down this quarter sequentially. Maybe if you can just quickly touch on that. And I'm not sure if it was because of the monsoons or the availability of talent in the field. But just on a big picture basis, you outlined a very significant untapped opportunity for smart meter in the country. So maybe if you can just kind of help us understand the addressable opportunity for AESL over the next 3 to 5 years. And from a market share perspective, what would be the constraints?

So Manish, you are right, the installation rate reduced in the last quarter as compared to the quarter 1. But essentially, that was because of ugly rain continuing even till now. And geographies like Maharashtra, Uttarakhand, Assam and even Bihar this year witnessed a lot of rain that impacted the progress. But now we are catching up again. We have already reached to 20,000 installation as of now. We want to push it up to 30,000 installation per day. All the resources are lined up accordingly and all the materials and manpower is available for achieving 30,000. As far as addressable market is concerned, there is about INR 10 crore smart metering opportunity that we think that will come in a year or so, essentially from Tamil Nadu, Karnataka, Telangana, Madhya Pradesh and Punjab. These are the main geographies from where we expect smart metering opportunity to come.

And just lastly, K.P., just on that, what do you think your share constraints might be? It seems to me that on the ground, your share is probably running higher than what you sort of in the initial go around. So maybe if you can just touch on that.

So Manish, sir, our market share is about 18%, 19% in terms of order, but our installation market share is about 23%, 24%. And we will continue to have that kind of better installation rate as compared to all other players. And as we add new geography, probably we will be able to increase both market share in terms of contract as well as in terms of installation.

Okay. That's super helpful. And just lastly, quickly for Kunjal. Leverage is at 4.4x at the end of second quarter. And I think, K.P., going back to your earlier comments, you mentioned that the earnings are going to be second half weighted. So would it be fair to assume that the leverage by the end of the year should be lower, maybe closer to the lower end of your target?

Yes, yes, you're right. So basically, it would be in that range of around 4x what we have always mentioned.

Okay, super. Well, congratulations again on a good quarter.

Sure. Thank you.

Thank you.

Next question comes from the line of Puneet Gulati with HSBC.

And my first question is on the transmission side of the business. Do you -- what do you see as a potential bidding pipeline for the second half of this year? And how aggressive are you likely to go in this phase?

Puneet, probably we will not be able to give you a very precise number for bidding pipeline for second half. But in next 1 to 1.5 years, the projects which has been identified by CTU and the central government is of the order of INR 90,000 crores. There could be addition from a few states as well like Maharashtra. So yearly about INR 80,000 crores to INR 90,000 crores of bidding opportunity or pipeline will be there in a transmission.

Okay. And what share do you assume for yourself?

So currently, we are operating about 25 percentage, and we would like to continue to have that kind of market share.

Understood. And on the cooling side, how is the response so far? And where else do you see the opportunity?

So cooling, Puneet, it is not only -- in fact, we spend a lot of time on creating market and awareness for the cooling solution because so far, it is not very known concept in Indian market. We have been interacting with a lot of players, including sector and sector federations and other players. We see now a lot of traction on the cooling side as well. In the last -- the first half, we could also get an LOI from 2 third-party developers for developing district cooling plants. And we see a humongous potential as far as district cooling is concerned in India. So we'll continue to work on developing market and making aware about advantage of having cooling district cooling solution.

Understood. And lastly, if you can talk about any updates on the UP side on private addition of DISCOM. What are the dates likely? And how big is the opportunity you see for yourself?

So there is no specific update from the UP side, but they continue to mention that they will come out with RFP very soon. So we are eagerly waiting for that. We believe that they had a few conversations with the regulatory commission. They had certain queries and suggestions. So probably they are incorporating it and then they will come out with RFP.

Okay, that's helpful. Thank you so much and all the best.

Thank you.

Next question comes from the line of Nikhil Nigania with Bernstein.

My first question is on the distribution side. Good to hear an update on the parallel license debate. But now that a draft electricity regulatory changes are out, I wanted to hear your thoughts on how do you see this space evolve going forward in terms of new opportunity for AESL in distribution?

So Nikhil, the new draft also says and clearly, the intent of government is there that they wanted to increase private sector participation in distribution. They are, in fact, further proposing to provide enabling provision for second license. In fact, the current legal provision says that you have to create your own network when you become a second license. The draft amendment proposed that the second license -- new licensee can use existing distribution network of the existing licensee as well. So it is clearly a good sign for distribution sector, and it will create a lot of opportunity for private sector player.

Got it. Understood. So in a way, is it fair to assume it could open up opportunities for you to enter new cities without having to deploy your own CapEx?

So Nikhil, our view is a little different. We might not use existing network of our distribution company because we believe that the major differentiation between you and the incumbent distribution company would be reliability of supply and quality of services. Now the moment you ride on the existing network, probably you might not be able to differentiate on those 2 aspects. So we might go ahead with our own network as it is provided in the current regulation.

Understood. Very clear. My second set of questions is on the transmission side. AESL has been winning quite a fair bit recently, especially in the HVDC projects. What would you say is the reason for that? Is it just that the competitors' hands are full? Or is there something else which is the reason? And secondly, on transmission, you highlighted right of way as a challenge, but the March regulations were expected to ease that with higher compensation for right of way, but has that not been the trend? So these are 2 questions I had on transmission.

So to answer your first question, probably I may not be able to comment as to why Power Grid is not able to take, but I can certainly comment on why we are in a position to take. We have been able to establish that kind of relationship with those major OEMs. And the last particular project, which was Khavda Olpad. In fact, in this particular area, we are already doing 4 projects there. So we exactly know the, the ROW challenges during in this particular area. That is the reason why we have been able to take this HVDC project through bidding.

Got it. And the second question, if you could answer as well, right of way, the reason things have not improved despite higher compensation norm?

So right of way, all the required legal framework is now in place. So after last year's policy intervention from Government of India, most of the state has notified their policy for right of way. Essentially, these policies are targeting to give a fair compensation to the landholder. To use those policy framework, you have to go through that process of getting order issues from collectors. That also involves public hearing and sometimes that process takes time. So as I mentioned earlier in the call, what we do is we use both the route parallelly. We directly negotiate with the farmers, take a decision on the ground and immediately implement it. And also wherever we have a problem of ROW, then we use that route, which is through collector and collector order compensation. And if the situation worsen, then we use that state machinery and police protection for ROW. But it's basically a hybrid concept. We only don't depend on one route because that could take a lot of time.

Makes sense. Makes sense. The last question I had was there is this news on Adani Group's tie-up with Google for a data center. Any role you envisage for AESL also in this opportunity? Role in the Google data center.

Sorry, I couldn't -- so probably we will have an opportunity for AESL in terms of providing energy solutions and timely connectivity because like what we did last time as well for Microsoft, when they were developing a data center, we created connectivity in infra for them. Similarly, we will also have an opportunity of creating infra for connectivity and also provide energy solution to data center. because they will certainly be very, very keen to have energy solution, which is predominantly coming from a green power.

Next question comes to the line of Love Sharma with JPMorgan.

Just wanted to understand 2 things. I think you mentioned about the AEML's plan for the buybacks which you have done and the cash surplus you're running. If you could just give some broad numbers for AEML in terms of what is the debt outstanding currently, including any short-term debt, which has been repaid or will be increased? Or secondly, what kind of future buybacks we can think of on that line? And second question would be on the CapEx side. If you could just update for second half, what is the target across the different businesses?

Sure. So on the AEML debt position, so that company continues to delever it. Last quarter, we did $44 million of a bond buyback of the GMTN bond. Earlier, we did close to $49.5 million bond buyback in Q1 of the 2030 we did. And earlier, if you recall, we had done $120 million of bond buyback. So based on that, whatever surplus that, that company is generating, we would continue to go down that path of continuing to do the bond buybacks in AEML. Plus you would notice that whatever short-term working capital also AEML had, so we carried about INR 400-odd crores of short-term loan in AEML that also got paid down during the first half year. So that business will continue to delever based on whatever surplus that AEML has. On the CapEx front, that company has roughly around INR 1,600-odd crores of CapEx planned, of which INR 575 crores has been incurred during first half and roughly around INR 1,000 crores would get incurred during the second half. Generally, you would know is that it is always lopsided in the second half because the first 3 or 4 months, that is June, July, August are predominantly monsoon months where the CapEx is not done during. So it's lopsided in the second half. So INR 1,600 crores would be the estimated CapEx for the full year.

For distribution in AEML.

Yes, that's right. So sequentially, this was only for distribution, right? How about for the AESL on consolidated basis, maybe?

So total would be -- total CapEx would be of the order of INR 17,000 crores to INR 18,000 crores, INR 6,000 crores we have done. The breakup of INR 6,000 is INR 3,300 crores in transmission, INR 3,350 crores, INR 700-odd crores in distribution and INR 2,000-odd crores in smart metering. For the full year, we will do about INR 11,400 crores, INR 11,500 crores in transmission, INR 1,600 crores in distribution and INR 4,000 crores in smart metering. So in smart metering, we'll add about INR 2,000 crores. In distribution, we'll add about INR 1,100 crores in the second quarter. And in transmission, we will add about INR 8,000 in the second quarter.

Understood. Okay. So this is very useful. And one last question for me was, I think on the dollar bond side, we have this maturity coming up next year for the transmission 2026 bonds. Any thoughts currently or how are you planning to take care of that refinancing?

Yes, yes. So we are working towards it. And basically, we would like to refinance it. I mean there are various sources. It could be both a mix of dollar bonds or it could be a mix of rupee bonds, but we would refinance it much ahead of its maturity.

Okay in terms of pricing, could you indicate for if we have to go for INR pricing, what kind of pricing you see currently for those assets?

So as you know, these are AA+ rated in the Indian market. So accordingly, it would get priced.

Idea roughly maybe around -- should we think of 8%, 9%-ish INR terms?

Yes. Basically, currently, if you look at it, AA+ or AAA bonds are generally priced sub 8%. So in that region, it would get priced.

Next question comes on the line of Vishal Biraia with Bandhan AMC.

A couple of questions. One is on the status of license in Navi Mumbai because public hearing was done and all the formalities were completed by NARC. So what is holding it back?

Can you be a bit louder? I couldn't hear you.

Yes. Sorry, my question was on Navi Mumbai license area. The formalities by NERC, it seems were completed in terms of public hearing and others. So what is holding back the license? Is there anything else that is pending?

So now they have to issue -- the matter was closed for order. So now they have to issue an order against our application.

Okay. And what is the kind of CapEx that you foresee in this license area over the next few years once you get the license?

Sorry, CapEx for Navi Mumbai?

Yes, sir.

So we will have a CapEx of about INR 10,000 crores for Navi Mumbai entire area, which will span over about 5 years.

Okay. INR 2,000 crores per year would be the CapEx there, only in Mumbai. Per year?

Correct.

Okay. But that will be substantially higher, right? I mean Mumbai CapEx itself is about INR 1,600 crores, though you will have to put out the network fully there. It's not here. But is there -- I mean, understood?

No. So the density there is a little lower as compared to Mumbai. And the second is because we will have to fulfill the universal service obligation, -- what we have proposed is that we will bifurcate the entire area into 25 circles. And once we start investing into that circle, we will fully deploy network in that entire circle. So every customer will have access to our network in that particular area. Once we achieve the universal service in that entire circle, we will migrate to the second one. So therefore, the speed will be lower, but it is essential to ensure that universal service obligation is achieved circle-wise.

What would be the mix of industrial and commercial customers approximately?

So the commercial and industrial consumption there in Navi Mumbai currently is in excess of 50%. The rest is from small LT commercials and residential customers.

Okay. Okay. And on the transmission side, what would be the kind of project that you plan to commission this year? And what will be the addition to gross block that we should see in addition to the 3 projects that you've done in the first quarter for the balance 6 months, what should we see?

So in the next half, we will capitalize about INR 10,000 crores of CapEx. So at least we will commission 3 projects. We are trying to get fourth project also commissioned in the next quarter, but we'll at least commission 3 projects and that will add revenue of about INR 1,700 crores to INR 1,800 crores.

Next question comes from the line of Dhruv Muchhal with HDFC AMC.

Sir, in the opening comments, you mentioned that the CapEx -- I missed, CapEx for capitalization this year will be about INR 1,000 crores, INR 1,000 crores revenue run rate of that -- or EBITDA run rate of that will be about INR 2,800 crores. So this is the CapEx number probably that gets capitalized over the next 2 years and then the revenue run rate -- then the EBITDA run rate will be realized. What you capitalized this year, the EBITDA run rate for that would be how much, sir?

So this year, we will capitalize in transmission projects close to around INR 15,000-odd crores, which will translate to additional tariff of in the range of INR 180 crores or INR 1,900-odd which is only transmission business. Similarly, in case of AEML or distribution business, I mean, there is no offset of CapEx. Whatever incurred CapEx is the capitalization. So INR 1,500 crores, INR 1,600-odd of CapEx will translate into a tariff or revenue of around INR 250 crores to INR 275-odd crores. And smart meter based on its CapEx will give INR 800-odd crores of additional revenues EBITDA. So that itself would translate, I mean, INR 1,800 crores, INR 1,900 crores for transmission, INR 250 crores, INR 230 crores for distribution, INR 800 crores for smart meters will give INR 3,000 -- INR 2,800 crores to INR 3,000-odd crores of earnings from the INR 17,000-odd crores of capitalization that we will do in each of these years.

And Dhruv, just to clarify, in that INR 1,900 crores, INR 1,800 crores, INR 1,900 crores transmission number, the already commissioned projects already commissioned projects which is INR 230 odd crores is not included. So, in total, INR 2,100 odd crores in transmission.

This was excluding. Okay, perfect. Got it. So, the second question was on the capex in the transmission business. So, for the full year, you're expecting about INR 10,000 odd crores, INR 11,000 odd crores capex. First half you have done about INR 3,000, INR 3,300. So that's about INR 7,000 crores of the remaining 2H.

Capitalization, we did about INR 295 crores of capitalization in the first quarter -- first half. And in the second, we will do capitalization of about INR 12,000 crores.

Yes. Sir, the CapEx is a significant increase. So for the second half will do about INR 7,000 crores, INR 8,000 crores in transmission CapEx versus last year second half, you had done about INR 4,000 crores. So that's a significant jump in the CapEx run rate. And if I see 1H versus -- this year versus 1H last year, the jump is not as strong. So just trying to understand what's driving this? Is 1H this year was weak because of monsoon and I don't know, right of way issues and you expect things to resolve in the next second half. So just trying to understand what drives the confidence that this CapEx run rate can be achieved.

So this year, you must have noted that we have started another 4 projects. where now -- so all the approvals and other things are in place. So now you will see a lot of CapEx deployment in those newly started projects. And we will also continue to do CapEx in the projects which are already under construction, which are getting commissioned in the second half or in the first half of the next year. So because the number of projects has increased and those projects will start see the inflection infusion of CapEx and therefore, you see that number increasing significantly in second half.

Got it. So basically, the momentum on projects is picking up and hence, which is driving the CapEx also the improvement in the CapEx run rate?

Correct.

And sir, the other question was on probably a bit macro, but just trying to understand, so we are seeing broader electricity demand in India remaining very weak. For example, in October, the demand is at an India level on a month-to-date basis is down by about 5-odd percent, and this includes the Diwali period also. So because you operate a lot of DISCOMs, on ground level, what are you seeing? Is it just purely weather? Is it -- I don't know. I'm just trying to understand what's driving such weakness in demand.

So sir, in our view, the demand sluggishness this year is only because of the rain, which has not only in widespread across the country, but the rain started from May, and it is still continuing. In fact, it was raining in the Western India yesterday and today. And you must have seen that prediction of cyclone on the East Coast. So the demand sluggishness in the country current year is only because of rain.

So even in Bombay, for example, probably it's a bit difficult to digress, but say, for example, for commercial customers, I'm assuming they will not be as impacted by the season or the demand trend is reasonably okay versus, say, for example, if you differentiate between domestic customers and commercial customers.

Mumbai in last couple of years, we see demand growth of the order of 5.5% to 6%. This year, you must have seen the numbers, the increase is only 2% and that was only because of the weather.

Got it. Got it. Perfect. Got it. This is helpful. And sir, last question, you mentioned about the data center that the group has signed and you can play a role in that. Sir, is it -- can you quantify what is the monetizable opportunity for us here for this? Because what we hear is globally large CapEx number. So just wanted to understand what role can we play and what monetizable opportunity can we have?

Yes, yes. I mean it's too early to put a number to any opportunity for that Google contract, which is there in data center. I mean as we earlier mentioned, whatever demand would be there for transmission or substation requirement for that to be fulfilled by AESL. But currently, it's very early for us to put any number on it.

Got it. Sure. Great, sir. Thank you so much and all the best. Thanks.

[Operator Instructions] Next question comes from the line of Mahesh Patil with ICICI Securities.

My first question is on the smart meters. So out of the 73 lakh smart meters installed, how much smart meter quantity has been commissioned, the meters that have achieved operational goal line?

So out of 73 lakh meters, which have been installed, the meter months which have been billed are 279 lakh meters, which have been billed for this first half.

No, no. But what are the number of meters commissioned?

67 have been commissioned, fully commissioned.

So Mahesh, what happens when you install the smart meter, you also have to then offer for a testing to distribution company. That usually happens every month. So you will see a difference of meter installed and commissioned of the order of installation equivalent to 1 month.

Okay. And sir, my second question is on the status of this Bhadla-Fatehpur -HVDC project that we had won. If you can share some insights as to what the progress there?

So the reverse bidding concluded, we were declared lowest bidder. Now PFC has to run their...

Sorry to interrupt I'm asking about Bhadla-Fatehpur, the previous HVDC.

We have won and now we are...

Bhadla-Fatehpur, we already got that SPV, LOI, we have finalized all the contracts. In fact, the construction work has already begun at the Bhadla land. We will also start transmission line erection activity in the next month itself.

Okay, sir. And sir, my last question, given the kind of CapEx that we are planning, is there any plan for a fund raise in the near future?

No, there is no such plans of any fundraise, except for whatever debt which we have to take for the projects which we are under construction stage.

And probably refinance.

And of course, refinance.

[Operator Instructions] Next question comes from the line of Shrinidhi with ASK Investment Managers.

A couple of questions on smart meter. Sir, given high profitability in the business and accounting standards, would it be possible to share cash -- post-tax cash profit that we will be making per meter per month? And the second question is, sir, across the entire portfolio, what sort of unlevered IRR you are likely to make?

Sure. So basis the current tariff profile that our smart meter portfolio has, our current revenue per meter per month is in the range of about INR 105 to INR 109 per meter per month. That portfolio gives us close to around 80% to 85% EBITDA margins. So based on that, based on our current meters that we have installed, we have reported an EBITDA of around INR 243 crores and EBIT of INR 120 crores for this half year. So that's this thing. And basis the current EBITDA margins we -- and basis the capital deployment in that smart meters, our internal returns are upwards of 20, 25 percentage on a levered basis or probably on an unlevered basis.

Okay. So unlevered is 20% to 25%?

Correct.

Ladies and gentlemen, as there are no further questions, we have reached the end of question-and-answer session. I would now like to hand the conference over to Mr. Kunjal Mehta for closing comments.

Sure. No, I would thank each one of you to taking out the time for attending this call. In case of any clarification that you need, we are just a phone call away or an e-mail away. Thank you once again for taking out the time.

Thank you. On behalf of Adani Energy Solutions, that concludes this conference. Thank you for joining us. You may now disconnect your lines.