Adani Enterprises Limited ($512599)

Ladies and gentlemen, good day, and welcome to the Adani Enterprises Limited Q4 FY '26 Earnings Conference Call hosted by Antique Stockbroking Limited. [Operator Instructions] Please note that this conference is being recorded. I will now hand the conference over to Mr. Ishan from Antique Stockbroking Limited for opening remarks. Thank you, and over to you, Ishan.

Thank you. Good evening, everyone. On behalf of Antique Stockbroking Limited, I welcome you all to the Q4 FY '26 Earnings Conference Call of Adani Enterprises Limited. We have with us the senior management of the company, led by Mr. Jugeshinder (Robbie) Singh, CFO, Adani Enterprises Limited; Mr. Arun Bansal, CEO, Adani Airport Holdings Limited; Mr. Rajesh Poddar, CFO, Adani Airport Holdings Limited; Mr. Manan Vakharia, Head of Finance, Adani Enterprises Limited; and Mr. Jitendra Khyalia, Investor Relations, Adani Enterprises Limited. We will start with brief opening remarks, which will be followed by a Q&A session. Thank you, and over to you, Mr. Arun Bansal.

Good evening, everyone. Thank you for joining us today for Adani Enterprises earnings call for the quarter and year ended March 31, 2026. AEL's portfolio comprises primarily of infrastructure-focused businesses, which spans across energy and utilities, transport and logistics and primary industry. Before I discuss quarterly earnings today, I want to highlight important elements of AEL's current EBITDA and asset profile, which has taken shape in the last 5 years and what does AEL's EBITDA represent today. AEL's EBITDA profile has once again transformed into an infra utility portfolio stand as we close this financial year with 80% of the EBITDA share coming from core infrastructure and services businesses. AEL is now getting ready for value unlock through demergers. These businesses are independent, sector-leading large core infra platform spread across airports, roads, ANIL ecosystem and long-term contracts in MDO services, which are ready to turn into value creation mode. Let's start with airports, already a sector-leading platform with robust EBITDA growth and rating. ANIL, cash flow-generating new energy ecosystem, expanding its capacity by 2.5x. Roads and mining services, stable cash flow-generating assets with long-term contracts. So what I want to highlight here is that when you take a broader view of an incubator entity like AEL, what emerges is a clear picture where initial and primary CapEx phase is reaching maturity across businesses and EBITDA mix has shifted to mature scalable platforms and path for value unlock is taking shape. Incubation journey is a repeatable playbook for us: build, stabilize, scale and unlock. We are already past first 3 phases and value unlock is the next phase of our journey. The road map we are building is designed not just to perform in the next quarter or quarter after that. It is designed to deliver compounded growth and strength over decades. We are pleased to inform you that we have completed India's largest greenfield Ganga Expressway project in a record time of less than 3.5 years. It's a long-term asset with a concession period of 27 years. For solar module manufacturing, domestic sales surged 96% on a year-on-year basis. As I mentioned in our earlier interaction this year, full year '26 is the stabilization phase of our incubating business. Despite global uncertainties, AEL has maintained the EBITDA on a year-on-year basis. In the next fiscal year, AEL is set to unlock EBITDA from Navi Mumbai International Airport, Kutch Copper and Ganga Expressway, which are expected to add over INR 3,000 crores EBITDA to AEL. Consolidated results for the year-end are total income of INR 1,943 crores, EBITDA at INR 1,464 crores. Profit before tax stood at INR 4,309 crores, and this excludes exceptional gain of INR 9,215 crores. In our mining services portfolio, we have a portfolio of 18 MDO service agreements with total peak capacity of 145 million metric tonnes per annum. We are currently operating at run rate annual capacity of almost 50 million metric tons from 6 services contracts, which is approximately 34% capacity of contracted potential of this business. During the quarter, MDO service contract for GP2 mine with peak capacity of 23.6 million metric tons per annum is made operational, taking our current portfolio to 7 operational service contracts. With this, now we have growth potential to achieve 86 million tonnes on an annual basis. This clearly demonstrates a long runway available for growth in this business. During the year, the dispatch volume up by 14% to 49.4 million metric tons, revenue up by 20% to INR 4,546 crores and EBITDA up by 18% to INR 1,986 crores. In Integrated Resource Management business portfolio during the year, the volume stood at 44.6 million metric tons. Revenue stood at INR 29,112 crores and EBITDA stood at INR 2,767 crores. Moving on to the airport. Adani Airport is India's largest private operator platform, operating a platform of 8 airports, including the recently commissioned greenfield Navi Mumbai International Airport. Adani Airport contributes approximately 23% of India's passenger traffic and 29% of country's air cargo volume, underscoring our scale and depth in India's aviation ecosystem. The results in '25-'26 were led by traffic — tariff revisions at our airport and more importantly, continued strong momentum in our non-aeronautical revenues. This demonstrates resilience despite geopolitical headwinds. Financial performance during '25-'26, we had passenger traffic of 95.3 million passengers, total income of INR 13,081 crores, up by 28% year-over-year and EBITDA increased by 55% to INR 5,394 crores on account of tariff revisions and non-aero growth. Aero and non-aero revenue delivered robust year-over-year growth of 26% and 31%, respectively, in financial year '26. Commencement of operations in greenfield Navi Mumbai International Airport from 25th of December 2025 and inauguration of new terminals at Guwahati, coupled with acquisition of AGHPort Aviation Services Private Limited for Airport Ground handling segment and SkyWave Private Limited for advertising capability and innovative media solutions, position Adani Airport for a strong performance and value creation in the coming years. So with that, I finish the commentary, and we can go to Q&A.

[Operator Instructions] We take the first question from the line of Mohit Kumar from ICICI Securities.

My first question is on the weak numbers for the quarter.

The press release says that Q4 FY '26 results were impacted by depreciation of Mumbai and newly commissioned and the copper assets, right? But however, in the EBIT numbers, which you shared, suggests weakness in commercial mining. So commercial mining EBIT has declined Q-o-Q. Can you please explain that why there is such a sharp decline in the commercial mining EBIT for the quarter?

Just one second, I'll come back to -- Mohit, the number that you were highlighting, which is basically on commercial mining business is related to the specific event — weather events that occurred in Australia in this year at Carmichael mine, which resulted in — which was largely a rain-related event where the regional — all the mines we had to pump out the water that has accumulated due to a seasonally or decadly higher rain. And that resulted in mining production being severely constrained for about just over a period of nearly a quarter. We expect that to not be there this year, but that was the main change in the commercial mining. And other part of that is because the way we have invested in Australia mining business, we take a noncash mark-to-market markdown, which has happened due to the exchange rates, which is about INR 600-odd crores. So those 2 elements, mark-to-market, which is noncash, purely market-based the way we account for it, that's about INR 600 crores and about another another INR 300 crores — just over INR 300 crores is related to the specific weather event that occurred this year.

Understood. That's very helpful. Second, can you help us with the new hyperscale order of 350 megawatt which you have signed this quarter? What is the time line for execution we are looking at?

This will be a standard for roughly, you can assume about 40 months.

And when do you expect to break the ground?

Ground is in preplanning stage. So just over a quarter.

Understood.

My third question is, is there any plan to go into — of course, we're already having a wafer of 2 gigawatt. Is there any plan to scale back to 10 gigawatt in the medium term in the next couple of years because given that a full list of wafer models is kicking from June 28. So is it fair to expect that we'll do — we will scale it up?

First thing would be that we will be prepared to, but from — we have the capacity to — but there is no specific planning other than that we want to make sure that the total line capacity on the modules and cells is what constitutes the wafer and in capacity with the changes at 29, we will evaluate that a little bit further to the period because overall, we can actually — because of the planning prep time, it's about 20 months for us to ramp up if we require to ramp up...

Understood. My other question related to solar only. We, of course, this quarter started selling capacity in India. Do we — will we continue to sell only in India in F '27 onwards? Or do you think there's some chance that we will start exporting also is export?

As I mentioned in my last call, we will continue to sell in India. There could be certain markets, ongoing marketing efforts continue. And there are — as you know, recently, there was a EU FDA also signed. So there are a few opportunities around EU area as well. But I think overall, we can — from the numbers point of view, as I mentioned, we can just assume that it's primarily India. And it doesn't — the thing it does is it compresses the margin, but we — that gain we will make from productivity as we go through this. So short term, the slight margin compression, which you notice in the numbers. But beyond that, I think from a business point of view, the sales and the ramp-up of sales is quite solid.

Understood. My last question is on the CapEx. What is the capital expenditure plan for F '22 and FY '21 based on the current CapEx program? And is it possible to break that into various segments?

So we expect like we were basically close to — with a one-off timing adjustment in CapEx around the airports. But overall, we were close to just about 95% of that hybrid CapEx this year. So it's been a very good year from that point of view. We expect the next year to be around the same level, about INR 40,000 crores. And of that, there are 3 core areas where the CapEx is especially airports, which will be roughly, give or take, about INR 17,000 crores. The PVC will continue its CapEx. Next year, we should hit — we capitalize close to about INR 9,000 crores. So that's '26. And another INR 4,000-odd crores would be in the natural resources, metals and mining space. And all of the businesses combined would be aligning new industries, hydrogen, et cetera. So those businesses will take the other INR 10,000 crores, all of the rest.

And any specific CapEx you're looking for data centers, if I may ask?

Yes, your data center, we don't specifically report out, but we expect to complete close to actually, because that, we can give you the exact number. So can we take this question on note and we can respond formally? So I don't want to just give you a...

We take the next question from the line of Prateek Kumar from Jefferies.

My first question is on your module sales. You closed the year at 4.9 gigawatts of sales. You have capacity of 4 gigawatts. So how should we understand your sales potential from your capacity? Typically, we understand that some of the peer companies are actually selling less than the rated capacity. So — but your volume seems much higher. So how should we look at these volumes to understand this better?

That is largely because of the demand that we have and the market — the participants in the market who are unable to utilize the capacity. So we have — you can say tolling, we use that capacity to sell higher than our capacity.

So you have tolling arrangement besides your rated capacity of 4 gigawatts, which you used to sell to your customers as well?

Yes, yes. So that's how...

And time lines of — I think you talked about it, but time lines of the next 6 gigawatt module and sell, can you just reiterate again?

Safely assume that you will start seeing some of the numbers towards the — for module line towards the second half of the year and then we should have — sorry, the cell module line and then the cell line, we should complete in the second half, and you will see the numbers from the next year onwards.

Sure. Other question is on your Mining Services segment. ended on a good note. How should we look at your full year expectation going forward? Like you ended on like 16 million tonnes and 64 million. So how should we look at growth in next year and year after that?

We sort of ended the year at around 50 million. You can expect that we will be high double-digit growth next year as — so close to 20% mark.

You said your rated capacity has — including the mines to be commercialized has also moved to 145. But based on your mines which are already operational, it's 86. Is that the right number?

No, I think I'll give you the exact number, just — so the peak capacity of the mines that are already operating is 86.6 of which we have this year produced roughly 50 — and it is expected to go up by, say, high double digits or close to say...

Okay. This quarter, you started giving corporate segment performance also. I think the EBITDA numbers are not mentioned. Can you highlight what is the EBITDA number of corporate segment this quarter?

We have to report that from the coming quarter, we'll report first time as a separate line item. We just — from the revenue point of view, we have to report given it met the revenue threshold of given the revenue number. But from an overall business point of view, we report from next quarter onwards.

Sure. And on Airport segment, again, strong exit to the year. When should we look at this company — this segment looking to monetize or not monetize, but demerger, which we have talked about in the past?

Lost then — ladies and gentlemen, we have the management line reconnected. Prateek, if you could please repeat your question for the management.

Yes, I was asking regarding the airport segment, you have exited this year on a strong note. When should we look at demerger of this business, which you have talked about in the past?

I think from airports business plan point of view, Prateek, I think the airport team — airport management would be ready by — we are comfortable around, say, '27, '28. And then after that, it's Board to determine. But I think from a business point of view, the business will be ready around that period.

And this business, does this require like any separate investment from outside investors? I know you have your internal CapEx plan running at INR 15,000 crores to INR 20,000 crores.

Business has its plans laid out, funded plans are laid out. It is just that are investors interested in that's the question? Yes, very much so because it's a premier business of its type in AU. So from a — but does the business need that from its own point of view? We are comfortable with the business plan as it is ourselves. But that doesn't mean that there are people not interested. And for a matter of disclosure, when it's appropriate, if there's anything, we will disclose to market.

Lastly, on Airport itself, like we talk about INR 1,500 crores, INR 17,000 crores CapEx. We are — so this goes on like what subprojects given Navi Mumbai, we completed this year, what are the sub projects which we are looking at for FY '27?

So a couple of key projects. Number one is the Phase 2 of Navi Mumbai, we have to start now. All the traffic projections of Navi Mumbai, Mumbai MMR region shows that we will be filled with Navi Mumbai in next 12 to 18 months. So we are accelerating that project. The second big bucket of the CapEx will go to our city side development across 5 — Mumbai, Navi Mumbai, Ahmedabad, Jaipur. And we are building new terminal in Ahmedabad also with Commonwealth Games for 2030.

We take the next question from the line of Manish Somaiya from Cantor Fitzgerald.

I did have a bit of a difficulty listening into the opening comments because of a lot of disturbance on the line. So apologies if I'm repeating the questions. My first question is on the EBITDA conversion in the fourth quarter. I mean, obviously, you had decent revenue growth, but EBITDA was down year-over-year plus vis-a-vis our estimates. We touched on the commercial mining piece earlier in the call, but perhaps if you can talk about Integrated Resource Management, what happened there, airports. And I imagine some of the deviation is from the start-up of Navi Mumbai roads in particular. If you can just help us understand what's going on in some of those segments, that would be super helpful. And more importantly, how we should think about 2027 for those segments?

So Manish, thank you. Just to go through with you, the overall consolidated EBITDA is flat, and I'll come to that point. And on a quarter-to-quarter basis, there is a slight growth. And largely speaking, 2 things are happening here simultaneously. The core airport business, the EBITDA is well on a quarter-to-quarter basis on a stable basis, if you look at it, is almost 50% higher. Roads business, as the road business transitions to majority of the risk-based assets online, which is Ganga Expressway, which has come online in April now. What you will have is that the — so it is the — overall, all 4 parts of the Ganga Expressway will become the largest business within the road business only and that asset itself will add — so the 3 assets, Navi Mumbai, Road and Copper itself will add close to — just say we are guiding to INR 3,000 crores, but around that in terms of — so roughly speaking, 16%, 17% of the growth next year will just come from these 3 assets, which have started operating. So the conversion that you're looking at, EBITDA conversion, is largely an accounting artifact. We booked the assets and the assets are now fully online. And so if you do a run rate on these, the assets — these assets would have on a run rate, if you were to report a run rate number on assets, we would have reported instead of 16 we have reported a number close to because assets operate only for 1 week or 1 day or 2 months, including the U.S. war issue for airport. But even then, if you just take the run rate, we are at a run rate already of about INR 19,000 crores EBITDA for the year, which is 20% — close to just under 20% higher than the number that we have or accounting number we have.

Okay. That's helpful. So maybe if I can ask you on your EBITDA mix. I think you highlighted 80% of EBITDA now comes from the core — the incubating businesses. How should we think about that mix over the next 2 to 3 years?

Basically why we highlighted this is because this is — we originally had outlined in our plan way back, you were not covering us at that stage in 2019 that if we stick to our plan, this is where we'll end up. Of course, when we say that at that point in time, it is outlandish because the 68 and 128 number was 12%, okay? So having — the idea was to just say that it happens in a methodical manner. And eventually, we have a core infra and utility platform. And as we go through our CapEx investment cycle, AEL will reflect the core infra and utility platform. If you look at Adani Group as a total, including AEL plus our other listed portfolio, we are about 82%, 25% core infra. Now AEL is mirroring that because this infra is taking precedence. So the next 2 to 3 years, we expect these numbers to continue inch higher a little bit, but — so broadly speaking, it will mirror our core infra strategy, which is about 4/5 of our total business is in core infra.

Okay. Got it. And then maybe lastly, on the leverage and the funding. I did see headline around $1.5 billion of new capital raise across domestic international markets. If you can help us understand the use of funds? How are you sort of thinking about staging that? And more importantly, how should we think about leverage overall? I think right now, you're at 3.9x. As Navi Mumbai, Ganga Expressway, some of the other assets come online and contribute fully. How should we think about the leverage profile of the business in 1 to 2 years? So 2 questions there.

Sorry...

No, go ahead. Yes.

Okay. So if I pass your question in 2 parts. See, the way we look at the leverage profile is that for us, the first and foremost becomes that we have 2 risk — fundamental risk profile in incubation. One is core infra and the other is metals, materials and mining. And we handle them quite differently. So for example, in core infra, which is platform, we have a net external debt of, say, INR 45,000 crores, which is about just under INR 5 billion. Against that, the regulatory asset base itself is just under INR 4 billion. So it is heavily supported by the regulatory asset base. On the metal materials and mining, we have a net external debt of about INR 2 billion, against where we call our operating assets, which are roughly around about INR 6 billion. So we keep a low or very conservative leverage profile on the metal materials and mining side, given the volatilities we face in those businesses. And we keep the normal core infra profile on the core infra side. We don't expect that to change. So our core infra will track the core infra. So we guide to that in the core infra while we are growing, we will be closer to the 3.5% to 4.5% range. And obviously, we'll be lower in relation to the mining. So we don't expect the numbers next year to be materially different from this, including our CapEx plan of about 4.5. So the 3.9% is likely to remain either flat or slightly down, most likely...

Manish, does that answer all your questions?

Yes, I think that's fine for now. I'll follow up separately.

We take the next question from the line of Dan Mishra from Sunidhi Securities.

So just one clarification. You said we could have INR 3,000 crores incremental EBITDA from copper business, Mumbai Airport and Ganga Expressway put together? Or am I reading something wrong?

No, no, not — yes, we will 100% have that.

Sorry?

We will close to 100% probability have that.

But that is not the peak EBITDA, right, that you are saying maybe for FY '24?

No, there will be — Navi Mumbai, as the airport team mentioned, Navi Mumbai is still ramping up. It will ramp up in about 18 months. So the peak EBITDA of Navi Mumbai itself will be closer to — in fact, it will approach this number itself. So we are not — it's not peak number at all.

Navi Mumbai, we have done close to INR 20,000 in the first phase, right? So on that.

It itself will be close to INR 3,000...

And Ganga Expressway, what is the total investment? And what could be the peak...

Just over INR 15,000. So will be 1. Copper itself will be close to just over 20 — so overall, these businesses will contribute at peak capacity somewhere between 6,000 to INR 6,800 crores.

And that number we can see in FY '28, mostly?

Towards the end of FY '28.

Okay — and my second question with respect to ANIL ecosystem. So we have INR 15,000 crores top line, which — so what is the breakup between solar and wind in that top line and EBITDA terms? Or you can give me the number — wind turbine number or revenue and EBITDA.

Just solar EBITDA is roughly around INR 3,700 crores and wind is INR 760-odd crores...

And top line for the sales?

The top line is just about INR 12,000 crores for solar, INR 3,700 crores for wind.

We take the next question from the line of Deval Shah from RBSA Investment Management.

My question pertains to green hydrogen ecosystem. So I just want a directional update on the progress of the green hydrogen as the — I just wanted to know how we — so what is the plan for the electrolyzers and when we are ramping up and are we under line to achieve our cost target for the GH 2? And pertaining to that question only — since now it's — the nuclear sector has been open for the private. So are we even considering for the strategic purposes to have that as a baseload backing green hydrogen to bring the cost down structurally? Or are we considering that also as an option? So that's the question pertaining to green hydrogen. And another question with regards to the road assets. So just a little clarify just on the bottom line of the road assets, why it has fallen for this year?

See, first, on the green hydrogen, currently, our main focus is to get the integrated manufacturing complex up. Second, do the pre-prep and planning for the new site for the solar and wind assets. So — and the electrolyzer testing is underway. So we will — once all of that is completed, we get good feedback. Then we look at on the — to your later part of the question, once we are ready with that aspect of the business, which is finally decision on implementing the green power and then the derivative of hydrogen later, I think that if you allow a certain time when we are ready to disclose the full operating details of that to the market once we have taken those decisions. So at this point in time, like I said, first objective to have the integrated manufacturing facility up and running fully at full capacity, not just the current capacities, preparing all of the work that is required for the site for the renewable power. Beyond that, we have not made any final investment planning and decision on that. In relation to the road business, now that we have completed the majority of our road assets, it will become a more standard form accounting treatment. So consequently, from the next year, you will get the baseline numbers of the road business. And you will see a steady, more predictable growth profile, which we will outline once Ganga Expressway operates for the next 5 months. We'll give a full-fledged briefing on that post the September.

Okay. And sorry, one more question on the CapEx. So we are planning for almost INR 40,000 crores, INR 45,000 crores of CapEx for the next year. And do we have any further 40,000 crores, right?

Yes.

So do we have any plan for further dilution or it's going to be more from the current expected cash generation and debt.

Dilution, I don't know what you mean by dilution. We do the rights issue. So it's not dilutary. But we don't have any plan for any specific equity issuances for the business now.

Ladies and gentlemen, with that, we conclude the question-and-answer session. I now hand the conference over to the management for their closing comments.

Thank you, Ishan and Antique for organizing meeting. Thank you to Manan team, and thank you to Arun, our CEO for the Airports business for being part of the conference. So you will see that airports will continue to remain part of each one of our conferences because of the stage at which the business is, and we'll keep the market informed as close to action, as close to its events as is allowed within the disclosure limits. So once again, to Ishan and Antique, thank you so much.

Thank you. On behalf of Antique Stockbroking Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.