ICICI Securities's research report on Adani Energy Solutions
Adani Energy Solutions (AESL) reported a good set of Q1FY26 results – revenue was INR 63bn (+32% YoY), EBITDA came in at INR 18bn (+10% YoY) and profit was INR 5.1bn (vs. losses of INR 8.2bn YoY; losses booked in base quarter due to Dahanu plant divestment). However, the underlying operating revenue remained flat YoY, at INR 46bn, owing to: 1) additional revenue from new transmission assets, largely offset by lower depreciation in cost-plus assets; 2) Dahanu plant divestment in base quarter, impacting distribution revenue despite higher energy sales YoY (+1%). AESL’s execution pipeline remains strong. It commissioned three transmission projects worth INR 23bn in Q1FY26. It also won one project worth INR 16.6bn in Q1, taking its transmission pipeline to INR 593bn (3.5x YoY). It also has orders of 22.8mn smart meters with an EBITDA potential of INR 24bn; it has installed 5.5mn meters as of Q1. Retain BUY with an SoTP-based TP of INR 1,127.
Outlook
We maintain BUY while valuing the businesses on an SoTP-basis with a target price of INR 1,127 (unchanged).
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