Adani Enterprises Limited (512599) Earnings Call Transcript & Summary

Good day, ladies and gentlemen. Welcome to the Adani Enterprises Limited Q4 FY '22 Earnings Conference Call hosted by Centrum Broking Limited. [Operator Instructions] Please note that this conference is being recorded. I will now turn the conference over to Mr. Abhishek from Centrum Broking Limited. Thank you. And over to you, sir.

Yes. Thank you, Linda. On behalf of Centrum Broking, I welcome all the participants to the Q4 FY '22 Earnings Conference Call of Adani Enterprises Limited. We have from the management team, Mr. Vinay Prakash, Director of Adani Enterprises Limited and CEO of Natural Resources. We have Mr. Robbie Singh, CFO of Adani Enterprises Limited; and Adani Solar management team, Mr. Saurabh Shah, Finance Controller; and Mr. [ Manan Vakharia ], Investor Relations at Adani Enterprises. I will hand over the call to the management for their opening remarks and after which we'll go to the Q&A session. Thank you.

Hi, good afternoon. This is Robbie Singh, CFO for Adani Enterprise. I welcome you all to the earnings call to discuss financial year 2022 and quarter 4 results. AEL continues to create value for its shareholders as a successful incubator for the past 2.5 decades and in this journey have recently listed Adani Wilmar in January 2022, which has further increased the return for our shareholders. This incubation model in the past created leaders in the respective sectors like Adani Ports, Adani Transmission, Adani Green, Adani Gas and has delivered returns at a compound annual growth rate of over 37% to shareholders. As our established businesses continue to sustain long term growth, we are making significant progress in attractive incubation pipeline comprising of Adani new industries: Airports, Roads, data center businesses which will further accelerate value creation for our shareholders. While the growth story continues, validating our efficient capital management program, AEL credit rating has been upgraded to A+ for long term credit lines and to A1+ highest rating for short term credit facility by CARE Ratings. Now just for a quick update on our developing businesses: In our Airport portfolio, we achieved financial close for our greenfield Navi Mumbai International Airport project with State Bank of India for the entire debt capital of INR 12,770 crores. Additionally, we recently completed the refinance program for Mumbai International Airport Limited of INR 7,700 crores. With these two steps are for stage one of the Airport capital management program is now complete. Further, the number of passengers handled during quarter 4 FY 2022 were at 12.4 million and during the full year, approximately 37 million. Now an update on the Roads business. We have received letter of award for Kagal-Satara Road project of 67 KM in Maharashtra on a BOT basis with the project cost of approximately INR 2,000 crores. Additionally, we have signed concession agreements in January 2022 for the construction and maintenance of -- for 3 greenfield Ganga expressway projects of 464 KM in UP. Adani New Industries update. In a green manufacturing ecosystem, the cell and modular line capacity expansion to 3.5 GW will be completed in Q2 FY '23 while the wind turbine manufacturing, [ turbine masters ] and rotor blades plant construction has started in Mundra. We have also signed an MoU with Ballard Power Systems to evaluate investment case for commercialization fuel cell manufacturing in India. This is the start of our green hydrogen ecosystem for which our Chairman had announced an investment of USD 50 billion in renewables to focus on the decarbonization of the industrial sector. Coming to financial performance, the consolidated total income for our financial year increased by 75% to INR 70,433 crores and consolidated EBITDA increased by 45% to INR 4,726 crores. This is right across our resources -- natural resources, Airports, Roads, all businesses performing to a level as indicated in our last annual report. Consolidated attributable profit after tax stood at IRN 777 crores. I will take this opportunity now to hand over to the CEOs of respective business lines with AEL. So first for our Mining Services business, Mr. Vinay Prakash. Vinay, over to you.

Thanks Robbie. Adani Enterprises Limited is the pioneer of MDO concept in India with an integrated business model that spans across developing mines as well as the entire upstream and the downstream activities. It provides the full-service range right from seeking various approvals, land acquisition, R&R, developing required infrastructure, mining, beneficiation on site and transportation to designated consumption points which is TPS. The company's MDO-ed for 9 coal blocks and 2 iron ore blocks with peak capacity of 100 million metric tonnes per annum and these 11 projects are located in the states of Chhattisgarh, Madhya Pradesh and Odisha. Towards the end of the quarter, we have made our 1 MDO coal mine which is Suliyari for APMDC operational. With this, out of 11 blocks AEL has now 4 operational mines that is PEKB i.e. Parsa East Kente Basan, GP III mine, Talabira II and III mine and Suliyari coal mine and one operational iron ore mine that is Kurmitar iron ore mine. In FY 2022, mining production volume increased by 58% to 27.7 million metric tonnes on year-on-year basis. Further, dispatch increased by 58% to 25.2 million metric tonnes on year-on-year basis. In FY 2022, EBITDA stood at INR 1,075 crores versus INR 1,143 crores in FY 2021. On the commercial mine front, two of the AEL subsidiaries have been declared successful bidders for commercial coal mines at Bijahan which is in Odisha and Gondbahera Ujheni East in Madhya Pradesh. With this, AEL has now total portfolio of 6 commercial mines across 4 [ MMMPL ] states of MP, Jharkhand, Chhattisgarh and Odisha. Now coming to IRM, which is Integrated Resource Management business. In terms of IRM business, the company provides end-to-end procurement and logistics services to its customers. We have developed business relationship with diversified customers across various end user industries. Our IRM business continues to maintain the leadership position as the #1 player in India. The volume in FY '22 increased by 2% to 64.4 million metric tonnes and in FY '22, EBITDA has increased 2x to INR 1,842 crores. Thanks. Now, I will give it Rahul for Solar Manufacturing.

Good morning to all of you. So, Mundra Solar PV Limited has established India's largest vertically integrated solar photovoltaic manufacturing facility of 1.5 GW. This has been in operation since last 5, 6 years. We also have the state-of-the-art plant along with research and development facilities within the electronic manufacturing cluster facility in Mundra. Mundra Solar Energy Limited, MSEL, is in the process of setting up a new plant of 2 GW capacity of solar cells and solar photovoltaic panels with the Mono PERC technology. This plant will be capable of manufacturing high efficiency modules of higher voltage in the range of 530 W to 540 W peak, both monofacial and bifacial. The entire facility solar cells and solar photovoltaic panels of this plant is likely to be commissioned in Q2 FY '23 in the coming 6 months. In terms of financial performance highlights, the sales during Q4 FY '22 stood at 304 MW versus 376 MW in Q4 FY '21. The EBITDA during Q4 FY '22 stood at INR 73 crores versus INR 207 crores during Q4 FY '21. The reduced EBITDA is primarily on account of disruption in the domestic as well as international construction market, increase in cost of raw materials and commodities and the resulting fall in demands. The sales volumes during FY '22 stood at 1,104 MW versus 1,158 MW during FY '21 again due to similar reasons as the rising cost. EBITDA during FY '22 stood at INR 379 crores versus INR 828 crores during FY '21. The reduction in EBITDA is mainly due to the increase -- significant increase in raw materials and commodity prices. The demand emanating specifically mentioning about the CPSU since that is the very large market. The demand emanating from CPSU tranche was serviced by Adani Solar in H2 of FY '22 as was communicated earlier. There is still some pending demand from the same tranche of orders which will continue to be serviced by Adani Solar in FY 2023 also. Additionally, CPSU tranche 3 aggregating 6.2 GW of AC capacity is already being tendered to CPSUs like NTPC SJVN, NHPC, SECI etc. The demand for modules of almost 9 GW under this and 6.2 GW of AC capacity will be seen in FY '23 and FY '24 and Adani Solar with its integrated cell and module lines will be well poised to make the best of this large emerging demand. The Government of India has announced imposition of BCD on imported cells and modules with effect from 1st of April '22, and this levy of BCD in the long term shall give boost to the domestic manufacturing facility. Thank you.

Open for Q&A now.

[Operator Instructions] The first question is on the line of Mohit K. from DAM Capital.

Congratulations on a very, very good quarter and ramp up in various businesses adjusting during the financial year. My first question is how much is contribution of Australian coal mines in this quarter and is it a part of the IRM segment and how do you see the ramp up in FY '23 and how much you sold in Q4 FY '22?

Vinay, can you please answer?

As far as the Australian production is concerned now, we are slowly coming on better numbers. We, in this financial year, FY '23, we are planning to cross 11 tonnes to 12 million tonnes of exports out of Australia. We did the first shipment in January, the second shipment in March which actually came in April and now in May onwards, we are planning to have 4 shipments a month and then moving it to 5 or 6 and then 7 shipments a month with capsize vessels

Just to elaborate, for all practical purposes, contribution of Australian business will flow in from September quarter in real terms. And in the current numbers we -- we don't have much meaningful contribution from the Australian mining operation inclusive under the commercial mining business.

How does the capital cross capital expenditure in this mine which you have capitalized?

Approximately, just over $3 billion.

Understood, sir. From the mining, especially on the mining services the MD operation, what is expected volume or ramp for mines in FY '23? FY '22 was a very good year for us. And what is expected coal production in FY '23?

So Talabira, last year we did 6.7 million tonnes. This year we have a plan to do 10 million tonnes and considering the current coal prices in India, we have been requested to increase from 10 million tonnes to 13 million tonnes or 15 million tonnes and we are working with NLC and the local community to see what else we can do. But 10 million tonnes is for sure going to be coming from Talabira.

And what for the other mines, sir?

Other mines, PEKB, even though we have reached to the peak of 15 million tonnes as decided by MoEF and MOC but with lot of technology initiative we have proven that the capacity can be increased further, and we are happy to tell you that we have been given a confirmation approval from MoEF and MOC and customers to increase the capacity from 15 million tonnes to 18 million tonnes. So we will be moving from 15 million tonnes to 18 million tonnes as far as PEKB is concerned. Suliyari which started production last year, we wish to achieve the peak capacity in the [ first ] year itself which is again going to be a very big milestone for coal industry. As far as GP3 is concerned, we did close to 3.7 million tonnes to 3.8 million tonnes last year and this year we will touch the peak of 5 million tonnes. We hope to start one or 2 mines more in this financial year, one commercial mine and for sure one MDO which is Parsa and with everything together, we should be close to 40 million tonnes, 42 million tonnes.

Understood. On the coal trading business are we seeing higher inquiry for coal trading, given the core shortages across the country? Or do you think it'll flat given that the core prices are very high?

So, there is a huge requirement coming from the power sector and at these prices the requirement of the other industries, the small industries like textiles are low, but in terms of power sectors, the quantity requirements are huge requirements. It is becoming too difficult now for anyone to complete those requirements also. So, lot of requirements are coming from the power sector, the steel and cement sector which were shying away from coal imports in recent past because of the high prices, are coming that now because in India, the Coal India is not in position to supply coal to them and they are supplying everything to power sector. So, they are also coming out with lot of inquiries of imported coal. So if you ask [Foreign Language], yes we have a huge requirement coming out from everywhere except the small industries.

Understood Sir, lastly the solar manufacturing sense, we have seen an EBITDA contraction, margin contraction in FY '23 compared to sales for '21, how do you see FY '23 especially given there's a large capacity that will get commissioned? And the related question is that have you received LOA from Government of India for our integrated capacity from polysilicon to module and we have heard that the government committee is trying to keep the party balance PLI, have you heard anything on the time line?

Sorry. I'll answer that. I think the best way to look at it is that our entire renewable manufacturing ecosystem is part of Adani New Industries, so it is geared to respond to the requirement of Adani New Industries which would be establishing and which is in the processing of developing as I mentioned in my opening comment $50 billion of total investment for the purpose of production of green hydrogen and then hydrogen into products. So it is -- we are not, for the purposes of the manufacturing element of Adani New Industries which is solar manufacturing, electrolyzers, batteries and fuel cells, we are not reliant on government contracts for that segment. Although normal sales will continue to various governments, but now that the integrated plan of Adani New Industries has been activated, the question would be more relevant previously when we have just a solar manufacturing business.

Understood. But is it for that or the new integrated capacity which you're looking at?

Yes, we are putting in, you know when our total investment in the hydrogen chain will be in the order of just $45 billion. So, we will need this and more than this capacity.

Okay. Understood. Anything on the EBITDA margin output for the solar manufacturing in FY '23 and FY '24?

It's not now any longer relevant question because it's part of the Adani New Industries ecosystem.

The next question is in the line of Nikhil Abhyankar from DAM Capital.

I've got 2 questions first one is about Airports. So, what percent has increase in revenue for the Airports has a target for sharing revenue with the Airport authority? And are there any plans for other monetization?

No, I'm assuming you specifically referred to miles because in other Airports, it's a percent of fee, which we pay on per percent basis to the Airport authority. But on the revenue share, yes. I think over the next financial year, that would start. What was your second question?

Should I repeat the question?

No. Is that monetization aspect, it will come out with more than monetization aspects. It's how we develop the consumer non-India consumer facility that the Airport [ complexes ]. That will come out over this year progressively as they develop it Airport by Airport.

Okay. Understood. So, the next question is about Adani Wilmar. So do we have any plans for a further reduction in stake?

No, in India, we are required by law to reduce the shareholding from promoters to 75%, which will happen as step one. Beyond that we don't have any specific plans to reduce our shareholdings.

Okay. Understood. So, my last question is about data centers. You mentioned about data centers, so what should be the expected capital expenditure towards it? And what will be the capacity?

Data center CapEx, we expect to be in the order of about INR 4,000 crores, INR 4,200 crores or $600-odd million. From a capacity point of view, our target business planning of 300 MW which we are working towards.

And sir, one final question what will be the execution of Road projects in FY '23? Like the worth of it, the value?

From completion of view, we would expect to start completing or reach full completion on approximately 4 of our projects and more likely 3 out of 4 near completion and all 3 would be the HAM projects: Bilaspur, Suryapet and Mancherial and we would have completed -- we would begin completion of the Vijayawada.

And sir, can you give us a ballpark figure about the value of these projects?

The total construction cost contract, so jsut give me one second, I'll give you how much it is. Just one second. So the total remaining project cost of the first 3 which are near in completion is just about INR 1,900 crores and we have nearly finished majority of them, there are few hundred crores left to complete like for example, in Bilaspur CapEx left is just about INR 290 crores. On the Vijayawada, the project cost is INR 1,248 crores and about 20% of it is completed and we expect it to be near complete in the following -- coming year.

The next question is from the line of Giresh A from Morgan Stanley.

I just had a more medium-term question and apologies if this is covered in the opening remarks, I was a bit late. So across the several growth businesses that we embark on whether it is Roads, Airports, data center, New Industries and digital, we have out laid for some CapEx for 2025 and 2030. Just wanted to understand next 2 years, 3 years I mean what is the total CapEx that we are likely to incur across these businesses and if we can have some color around the funding plan volatility. And the second one was just around Airports. So we saw the release on closure of the debt today morning. So just wanted to understand the coupon rate for the same because I think that part at least I missed it, if it is already in the press release, sorry about that?

No, thank you for your question. Our CapEx for the next 2 years where we have the full clarity in terms of near certain numbers is approximately USD 5.1 billion this coming year and $5.3 billion in the next year. And then we have the following from there onwards in the following 5 years we would have a CapEx of approximately $49 billion. In relation to how we are funding that opportunity because the aggregate number they are funded on a project-by-project basis, so data center had its own capital management plan as does Airports and Adani New Industries. So we can run through if you have questions on anyone of the individual plans. But we follow, like for example on the toll Road projects, which are concession based projects, not HAM projects generally speaking that equity ratios are about 55:45. From a funding point of view, I will just come to your Airport question that you said we recently announced the completion of the USPP transaction for Mumbai Airport, it has coupon of 6.6% on the 7-year paper. And so if you look at the last 3 completions at Adani Airport Holding which is part of Adani Enterprise, for construction, we have used bank debt, Indian bank debt, for ongoing funding we have used U.S. private placement paper and for Adani Airport Holding to continue the CapEx program, we have used international banks. So, all 3 are in the mix global capital market, domestic banks, global banks and that currently remains the source of capital plus our own equity that is required for the projects which AEL itself has sufficient free cash flow to fund these activities. In addition AEL has recently announced primary equity transaction of INR 7,700 crores with International Holding and that forms the part of our ongoing equity program to fund the various development activity at AEL.

Just to follow up on that, so about $10 billion -- $10.5 billion over next couple of years that you propose to spend, a large part of that would be towards Airports and New Industries. It is -- probably give a high-level split. And how much would be total equity requirement here which would be funded either internally or through equity raise at least for the next couple of years?

We have already raised enough equity to fund the activities plus AEL has cash flow. So for example, out of the $5 billion next year, $1.3 billion is approximately in the Adani New Industries and $2.6 billion is at the Airports. So that is the major chunk of it. Our Road business will take on $1.2 billion. In the following year, Adani New Industries would be close to $2.7 billion and the Airport business is by $1.6, Road will drop back to about $1 billion, 4.5, 5.3. So progressively running New Industries on the following 5 years, Adani New Industries will be about $41 billion of the CapEx, Airports being $4.3 billion. So out of the total $48 billion, so majority of the CapEx will be in Adani New Industries

Okay. And just if I'm allowed to ask this on New Industries how should one think about the ROC profile? I know, I mean, it's an evolving industry, but when you're making the business plan, I mean what is the thought process? How are you working through the various moving parts? Because some policy measures will continue to get announced. So, how should one think about the return profile in this business?

It's two-part business, it's infra plus energy. So on the infra, we expect to have cost of capital and achieve that which is closer to 15%. On the energy side closer to 20%. So we will hit those targets. So the entire business plan is based on achieving these targets and therefore also it is derivative into how we price the hydrogen. Our target is to produce 1 KG of hydrogen at $1

Last question, if I may ask, like the aspiration would be, how much of the market would you be like 20% of the market, or more than that number in 2025 or 2030?

No, it is not market share we are chasing here. We are chasing here is a lowest cost, lowest quarterly hydrogen price. And the market is very, very large. So we are not chasing the market here, we are just chasing our own production capacity. Our first plan that the Chairman announced a [ 50 billion ] with [loose ] 3.3 million tonnes of hydrogen, so it is a small part of the total market.

We'll move on to the next question from the line of Rohit Kothari from GeeCee Holdings.

Congratulations Robbie, and the team on very eventful fund raise both at provincial level as well as Airport level. Robbie, just if you can throw updates on the various projects at the holding company level which we are undertaking; number one is the PVC and caustic soda and the copper smelter. These two would be the cash-generating businesses and at what stage of development are these at? Second on a longer term basis, when do you feel the Adani New Industries would be at the operating level throwing up cash flow means when would the EBITDA start hitting. As investors, when should we price that. Third, we are pleasantly surprised to see the new cost of funding at the Airport 6.6% is the phenomenal achievement, how should we see the other parts of the Adani Enterprise? What should their funding cost be and how do you see the rating of Adani Enterprise follow through in the ensuing quarters. And the fourth; for Vinay on the coal mining business at Australia, based on a 11 million tonnes mining this year and if you can throw light on the capacity you would have over the next 3 years. What would be the cost and what would be a very average rate we should expect as shareholders of the coal which we would sell and an approximate EBITDA and approximate cashflow because we feel that would be a game changer in terms of the cash generation. Because all these years we put in money and this is now time for us to reap. So we can throw a very conservative idea on the cash flows of the Australian business?

Vinay, you go first, because then I'll answer the other 3 questions.

Yes, thanks. So as far as the Australia is concerned, we are trying to achieve the annual capacity of 15 million metric tonnes in this financial year FY '23 itself. As you are aware that currently the coal prices are at the highest levels, so definitely we do see a good cash flow but as Robbie said earlier it is going to be reflected from September onwards. Now for the expansion plan, we are resolving logistic issues, mine is definitely there to 25 million tonnes if we get all the link in place. We can definitely go beyond 15 million tonnes and may touch 25 million tonnes to 30 million in the next 2-3 years’ times. As far as the cost is concerned, we are on the track to bring our -- this mine to the first quarter so we are having a very low cost as far as the mining and onward transportation and the port is concerned. You can expect a good cash flow coming from this mine in the future despite continuous prices at the current level and even if it goes down also, you can see a good respectable cash flow coming from Australia.

So, Vinay, just as a ballpark, if you were to do 11 tonnes or 12 million tonnes, rough cost of $50 to $60 and a rough $130 to $140 as a medium term realization. $70 to $80 on 11 million tonnes, is this a fair assessment to make like it is very difficult to project coal prices but would this metric be a reasonable metrics to put forward in our modules today or I am way off?

No. So, The volatility in this market is 30-40%, so saying that we can discuss about the cost whether it should be 40 million, 50 million, but in terms of selling price whether it is going to be $140 or $120 or $100 or it could be [ $180 ] also that depends on what is happening in the market. Yesterday the market has gone up by $25 production in one single day, the market has crashed $100 also in single day and had gone up by $100 also in single day. So with this...

You think a long-term average of $50 to $60 a tonnes is possible? Sometimes it's $100, sometimes it's $40. But $50, is that a sustainable average to take over a 4- or 5-year period?

It is difficult to say because as of now we do see this going on for at least 1 year or 2 years considering this change in the geopolitical situation. So what happens tomorrow is something which we need to see. As of now, the prices should be in excess of $100 for sure. Now whether It continues beyond a year is something which is going to be anyone’s guess. Nobody was knowing that coal prices would touch $400 peak.

Robbie, if you can answer some of my questions it'll help.

I think with metal business we are basically trying to maximize the use of the facilities within our Mundra ecosystem -- APSEZ ecosystem, we expect the metals cash flow to commence. All the construction is underway, so both copper and PVC cash flows to commence from '25, '26 onwards and we should see that in our cash flows coming in from 2026. That will be significant cash flow contributors because of the product set they are in. The Adani New Industries timing is pretty much on track. We should have the first hydrogen somewhere in '25, '26. Regarding target period, we are on track to do that like I said the work is commenced and is going on full speed so that would be the first steps towards the first 1.1 million tonnes capacity. I think the first phase itself will be close to 150 KGs, so that should be around 2025, 2026 period. In relation to the overall funding expectation, yes to complete this transaction during this Ukraine-European issue that a look through prices is great for the Airport business. We continue to expect that the pricing will continue to improve from here onwards as the quality of the Airport business and the recovery increases. So we have already touched approximately 37 million passengers for the platform and pretty much on the domestic side is almost nearly completely recovered to pre-COVID levels. And then in relation to your question related to the credit quality, already AEL’s ratings have improved last year, was upgraded last year. If we continue on the track, we expect that it will again see a positive credit note. On the short-term rating, it is already at the highest level.

The next question is on the line of Bharat Shah from ASK investment Managers Limited.

Yes, Just a broad strategic issue. Are we not attempting too much because on one end, we have an entire range of activities in the energy footprint. Some of that have fructified, some others we are seeking to seed now, on the logistic chain and related activity, then material activities that we are attempting now, even PVC, on medical, on cement. I mean I think our hands are too full. And then there's a possible risk of attempting way too much whereby instead of our strategic capability and strength giving us some advantage, some of it starts becoming weakness because of the complexity and very large and too many activities we seek to do.

Thank you for your question, Bharat. Actually if you look at our CapEx program as an outline. Out of $48 billion of CapEx, $42 billion of our CapEx is in our utility/energy business which is Adani New Industries. So our utilities and energy business is still a largest CapEx business. And in the transport and logistic space, capital risk is broadly still in the 2 areas that are core to us which is Transport & Logistics and Energy & Utility. So, that is from volume perspective, they are the 2 areas we have the highest volume, highest investment, highest CapEx, highest everything in the two core areas. Health care as you mentioned, it is a small investment in the context of the group for us. It would be around of $500 million and our partner will have $500 million, that is it. In terms of the other businesses like metals et cetera, that are again just utilizing excess capacities within our current core ecosystem of energy, SEZ and development. So we are not actually going out and trying to seek, for example, areas beyond utilities and energy outside of an ecosystem. For our metals business, here it is simply being able to get a higher return on our asset for example, for port it becomes a higher return on SEZ business. For excess capacity in power it becomes that, so Adani Power is able to increase its PLFs by converting some of that power into metals. And similarly the waste product of this area goes into the ancillary industries, so allows us to create a circular economy. So I would say in the following way: if you look at the capital and investment risk, out of total of $49 billion of CapEx that Adani Enterprise has planned over the next period plus the existing $10 billion, so approximately $60 billion of CapEx. $48 billion is in Energy & Utility, $7 billion is in Transport & Logistics -- $10 billion is in Transport & Logistics, so out of $60 billion of our exposure, $58 billion of CapEx and investment risk is in the 2 core areas which we have been doing for the past 25 years which is Transport & Logistics and Energy & Utility. So additional risks that you are highlighting are less than 3% of our total investment and total balance.

No, Robbie that is perfectly appreciated. And bulk of our risk and rewards are lying in the areas where we have very demonstrated track record of delivery and core competence. I am saying strategically, in terms of the time and energy, in terms of management, vision and execution, when we get into too many areas, capital relatively is less important of the four factors of production. I think the key factor I would say is the entrepreneurship which is what the group exemplifies. I am saying when we get into far too many areas, is our strategic bandwidth getting thinned out and whether it has repercussions on areas potentially where we have largest investment. So in other words, thinning out of the strategic bandwidth, can it be a adverse impact on the areas where financial and economic value creation of maximum stake?

Well, that is a very, very good question actually and what I can assure you is that this is one of the biggest areas which as organizational capability that we spend a lot of our time. I, myself, am here as AEL CFO but I am also Group CFO and so this is the massive area of attention that is organizational capability and at the same area is also a massive area of interest to promoters and to Mr. Adani himself. So we are acutely aware of this and we are very careful when we achieve, you are right it is only 1% or 2% of our capital but we are very careful as to what exactly we get into. So if you look at the matters, we are basically get into matters which are primarily an energy story, so where we simply are deploying our excess energy resources that various of the portfolio companies already have. Excess land that various of our transport logistic companies have and deploying that excess capacity into an adjacent area where we believe that we can execute in lowest quartile cost basis. But your central thesis is that as we grow, one of the core areas of attention we should have is on the organization capabilities to strategic capability and we are very much focused on this aspect and we are very mindful of this risk and I assure you and I assure all investors that this is a central risk assessment, risk management factor for us when we consider something that is how do we support that from both strategic perspective, policy perspective, risk perspective and also the organization capability perspective. I do not have a answer as to yes-no to your question because it’s a very, very important question. It is an ongoing question and continuing management question but we are very much focused on this area.

Just one last supplemental question to the main question. Rationally speaking, while I understand the macros like a continued our energy activity and macros of way of expressing that energy into some matter form utilizing the same capability resources and converting into an alternate form so there is that strategic fit there. But cement, medical does one have to do so many of that?

We are in 2 cores sectors of infra, to answer to your question, which is Transport & Logistics and Energy & Utility. As an infra player, health care is a possibly third infra which is for a growing country, young country, is a massive growth area for infrastructure. So we have to evaluate whether we can develop a third, fourth infra platform. Now we understand that, that is why better to start of with it. It is likely to be a partnership, so it is not like something that we will do ourselves. So that is first part of it. It is a core infra for India and we will stay with the core of India and yes it is the new infra vertical we will look at but that is as a growing group, being able to deploy capital will continue to deploy capital to the core infra, that is number one. In addition cement and all, it is too early to comment but once we are ready with it or we actually have formal announcements in relation to how we visualize this in the medium term, I will come back to you, but I just wanted to clarify on the health part.

The next question is on the line of Mohit K. from DAM Capital.

Sir, my question is what explains the increase in revenue and EBITDA in Airports quarter-on-quarter because our passenger numbers were down Q-o-Q?

That was simply one event issue of January Omicron change. That's all.

No. So, my question is here, the revenue has gone up, but the, but the passenger numbers are down, right? So, so what explains the increase, the revenue for the Airport business?

That is the part of the business plan of Airport largely because of the fact that the gross spend rate, which is key metrics, is rising. And we expect as we continue to improve. Services at the Airports, we expect the gross spend rate to improve. But better impact of that would be seen we complete first round of CapEx. Your other question, as we outline the full-scale development of the Airport business over the next 3 years, We will give much more granular outlook into the gross spend rate target and now we are looking at various consumers at the Airport.

Are you saying that the non-revenues have grown faster Q-to-Q? Is it the right understanding?

Broadly, but it is basically underlying thing is that yes, the spend rate per passenger or non-passenger visiting the airport is rising.

Understood Sir. Secondly on the Adani New Industries businesses when you speak about hydrogen and fuel cell, are you looking at the full gamut of hydrogen, fuel cell, lithium batteries and are you looking into exports. And the related question is that, as far as the hydrogen is concerned, are you looking to put up a manufacturing capacity for the electrolyzer or are you looking to set up one to develop the hydrogen or sell hydrogen to the market. And I heard that 1.1 million tonnes is a number, right? 1.1 million tonnes seems to be a large number for putting up the hydrogen development.

No, actually our investment plan is $50 billion of investment that would be 3.3 million tonnes. Our phase one is 1.1 million tonnes of hydrogen. And we are -- our primary -- Adani New Industries' primary focus would be production of green hydrogen, so this is pure green hydrogen, not blue or gray hydrogen but green hydrogen. And within Adani New Industries, and on the manufacturing side, yes as a manufacturing division or manufacturing entity it will manufacture electrolyzers as well and integrate electrolyzers. But the primary focus, 90% of the investment will be in the production of green hydrogen.

Understood. Are you looking to export all this green hydrogen or are you looking only at India as your market?

That aspect in relation to the question, I think is probably best addressed because it would be giving statements, that we have not yet outlined, to the market. It would be best the next quarter, or the quarter after, when the full-scale plans will be made public.

Understood. Lastly sir, if and when you decide to expand our [ mining ] capacity how much the incremental CapeEx will be required to upgrade the mining capacity let us say from 10 million tonnes to 40 million tonnes? If I remember the original number was 60 million tonnes for the production.

We have no plans to expand capacity at this stage. We will come to that bridge when we get the approval.

The next question is in the line is from [ Sabital Talkar ] Allinfra Finance. As there's no response from the current participant, that was our last question. I will now hand the conference over the Mr. Abhishek for closing comments.

Yes. I would like to thank the management of Adani Enterprises for giving us the opportunity to host the call and thank you to all the participants for participating in the call. Thank you. Any closing comments from your side, sir?

Yes. On behalf of Adani Enterprise and Adani Group, I'm Robbie Singh and thank you everyone for participating.

And thanks, Abhishek, for arranging this. Thank you so much.

Thank you. Yes.

On behalf of Centrum Broking Limited, that concludes this conference call. We thank you for joining us and you may now disconnect your lines. Thank you.