Adani Energy Solutions' Order Book Swells To Rs 547 Bn
POWER & RENEWABLE ENERGY

Adani Energy Solutions' Order Book Swells To Rs 547 Bn

Adani Energy Solutions Ltd, India's largest electricity transmission and distribution company, has won two new transmission projects, helping swell its order book to Rs 547 billion -- more than three times of the work order it had at the start of current fiscal in April 2024. In October-December 2024 -- the third quarter of the fiscal year April 2024 to March 2025 (FY25), won two new transmission projects worth Rs 284 billion in Rajasthan, related to the renewable energy park, Jefferies said in a report. These order wins have pushed up the company's market share in TBCB (tariff-based competitive bidding) orders to 24 per cent, from 17 per cent in the second quarter. AESL's current order book now stands at Rs 547 billion, as compared to Rs 170 billion in the beginning of the current financial year. This is the highest order book amongst all private sector transmission companies. During the quarter, the company commissioned one transmission line, adding over 1000 circuit kilometers to its network, which stands at 26,485 cKM and 84,286 MVA of transformation capacity. As of December 2023, these were 20,422 cKM and 54,661 MVA. In distribution, the company supplies power to over 3 million customers in Mumbai metropolitan and Mundra SEZ regions. During the quarter, Mumbai market saw a 3 per cent year-on-year increase in power sale to 2.57 billion units, while the Mundra market saw a 30 per cent rise to 236 million units. The company has applied for a parallel distribution license in Navi Mumbai, Kutch, and Ghaziabad-Jewar-Bulandshahr area. "We believe AESL should see 16 per cent revenue CAGR and 62 per cent profit CAGR in FY24-27E, driven by locked-in growth in both transmission and distribution business," Jeferries said. "Rs 27,300 crore projects are targeted to be commissioned by October 2026". In smart metering, AESL was the lowest bidder in the cancelled smart metering tender of 8.2 million meters in Tamil Nadu. This order quantity is not part of AESL's existing pipeline of 22.8 million meters. AESL said it will participate in the rebidding when it comes up. Jefferies expects AESL to add 4.5 million smart meters by the end FY25 and 10 million by FY26, of which 7 million will come from existing contracts and balance from new wins. AESL's capital management program prioritizes reducing volatility in interest costs through long-tenure bonds. The company is also refining its debt management strategy to match the life of respective assets at fixed rates as much as possible. "AESL's management says it believes in minimising volatility in its asset base across parameters: debt is being refinanced and raised to match the life of the respective asset at a fixed rate as far as possible; vendor back-to-back arrangements to limit the impact of commodity price changes; and land studies for faster project commissioning," the report said, adding downside risks include inability to maintain interest rate; and market share loss.

Adani Energy Solutions Ltd, India's largest electricity transmission and distribution company, has won two new transmission projects, helping swell its order book to Rs 547 billion -- more than three times of the work order it had at the start of current fiscal in April 2024. In October-December 2024 -- the third quarter of the fiscal year April 2024 to March 2025 (FY25), won two new transmission projects worth Rs 284 billion in Rajasthan, related to the renewable energy park, Jefferies said in a report. These order wins have pushed up the company's market share in TBCB (tariff-based competitive bidding) orders to 24 per cent, from 17 per cent in the second quarter. AESL's current order book now stands at Rs 547 billion, as compared to Rs 170 billion in the beginning of the current financial year. This is the highest order book amongst all private sector transmission companies. During the quarter, the company commissioned one transmission line, adding over 1000 circuit kilometers to its network, which stands at 26,485 cKM and 84,286 MVA of transformation capacity. As of December 2023, these were 20,422 cKM and 54,661 MVA. In distribution, the company supplies power to over 3 million customers in Mumbai metropolitan and Mundra SEZ regions. During the quarter, Mumbai market saw a 3 per cent year-on-year increase in power sale to 2.57 billion units, while the Mundra market saw a 30 per cent rise to 236 million units. The company has applied for a parallel distribution license in Navi Mumbai, Kutch, and Ghaziabad-Jewar-Bulandshahr area. We believe AESL should see 16 per cent revenue CAGR and 62 per cent profit CAGR in FY24-27E, driven by locked-in growth in both transmission and distribution business, Jeferries said. Rs 27,300 crore projects are targeted to be commissioned by October 2026. In smart metering, AESL was the lowest bidder in the cancelled smart metering tender of 8.2 million meters in Tamil Nadu. This order quantity is not part of AESL's existing pipeline of 22.8 million meters. AESL said it will participate in the rebidding when it comes up. Jefferies expects AESL to add 4.5 million smart meters by the end FY25 and 10 million by FY26, of which 7 million will come from existing contracts and balance from new wins. AESL's capital management program prioritizes reducing volatility in interest costs through long-tenure bonds. The company is also refining its debt management strategy to match the life of respective assets at fixed rates as much as possible. AESL's management says it believes in minimising volatility in its asset base across parameters: debt is being refinanced and raised to match the life of the respective asset at a fixed rate as far as possible; vendor back-to-back arrangements to limit the impact of commodity price changes; and land studies for faster project commissioning, the report said, adding downside risks include inability to maintain interest rate; and market share loss.

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