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Adani Enterprises Ltd

| Q2 & H1 FY26 Earnings Conference Call

NEUTRAL SENTIMENT

Report Source

⬤4th Nov 25

Summary : Adani Enterprises is in a deep investment phase, with incubating businesses driving EBITDA growth, supported by strategic capital raises and new project commissions, despite some cyclical and tariff-related headwinds.

Management Perspective positive : We expect the next period of 10 years to be the most exciting with our current startup phase. AEL is well placed as an organization with balance sheet and technical capability to deliver on the promises. The pleasing part is that EBITDA from incubating business now contributes over 70%.

Concall Report Analysis & Insights

Business Overview

  1. AEL's portfolio includes incubating and established businesses across diverse sectors.
  2. Incubating businesses like Airports and Data Centers now contribute over 70% of EBITDA.
  3. Established segments include mining services, metals, and commercial mining.
  4. Adani Airports is India's largest private airport platform, handling 23% of passenger traffic.
  5. Mining services operate at 36% capacity, offering significant growth potential.

Future Growth Prospects

  1. AEL is in a deep investment phase, with new assets completed and more in progress.
  2. Received LOA for five new road and water projects worth INR20,000 crores.
  3. Partnered with Google for India's largest AI data center campus in Andhra.
  4. Navi Mumbai Airport Phase 2 capex of INR30,000 crores is commencing soon.
  5. 6 GW solar module and cell line is on fast track for June '26 commissioning.

Management Insights

  1. Initial assets of the deep investment phase are now completed and ramping up.
  2. Significant EBITDA unlock is expected from completed and near-completion assets.
  3. Board approved a INR25,000 crores rights issue to strengthen the balance sheet.
  4. Rights issue proceeds will primarily fund airport, road, and new industries growth.
  5. The next 10 years are expected to be exciting with current startup phase assets.

Signs of Skepticism

  1. Details on Google AI data center revenue and profitability are currently confidential.
  2. Solar module sales impacted by US tariff uncertainty for the next 18 months.
  3. Cash flow from operations was significantly lower year-over-year due to adjustments.
  4. Defence and aero business is not yet a significant independent reporting segment.

Risk Factors

  1. Commodity trading business is cyclical and impacted by geopolitical issues.
  2. Solar module sales affected by US tariff uncertainty and pricing rationalization.
  3. Cash flow from operations was down due to copper plant inventory changes.

Good To Know

  1. H1 FY26 total income was INR44,281 crores, EBITDA INR7,688 crores.
  2. Adani Airports serviced 46 million passengers, with INR5,882 crores revenue.
  3. Adani Airports EBITDA is INR2,157 crores, running at INR1,000+ crores per quarter.
  4. H1 capex was INR16,300 crores, with FY26 target around INR36,000 crores.
  5. Green hydrogen electrolyzer pilot results are expected by mid-next year.

Key Drivers

  1. Navi Mumbai Airport operations commencing soon.
  2. Kutch Copper plant ramping up production.
  3. Ganga Expressway nearing 90% completion.
  4. Rights issue to fund future growth.

Key Analyst Discussions

Competitive Environment

  1. Discussion on solar module export mix remaining stable due to geopolitics.
  2. Inquiry about green hydrogen plans in context of SECI ammonia tender rates.

Financial Highlights

  1. Clarification on solar module sales decline due to US tariff impacts.
  2. Explanation for lower cash flow from operations due to copper plant inventory.
  3. Details on H1 and FY26 capital expenditure targets and business breakdown.
  4. Discussion on rights issue timing, stages, and specific use of proceeds.

Product Composition

  1. Questions on solar manufacturing order book and capacity commissioning.
  2. Inquiry about wind turbine third-party orders and PSU tender participation.

Strategic Considerations

  1. Inquiry about Google AI data center revenue and profitability timeline.
  2. Questions on Navi Mumbai Airport Phase 2 capex and final tariff order.
  3. Overview of defence and aero business future plans and segmentation.
  4. Questions on ANIL business utilization and green hydrogen development.
Adani Enterprises Ltd (ADANIENT) Concall Report Analysis & Insights | Dhanarthi