Adani Energy Solutions Ltd

Strong fundamentals fueling a resilient growth

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 TABLE OF CONTENTS

Summary 03

Valuation 04

Consensus vs Ventura Estimates 07

Band Charts 08

Peer Comparison & Scatter Plot 09

Financial Summary 11

SWOT Analysis 12

Company Overview & Growth Drivers 13

Business Quality Score 21

Key Management Personnel 22

Risk & Concerns 22

Quarterly Financials 23

Financial Statement Analysis & Projections 24

Disclaimer 25

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 Adani Energy Solutions Ltd

BUY @ CMP INR 772 Target: INR 1,675 in 24 months Upside Potential: 116.9%

Strong fundamentals fueling a resilient growth

Business model – AESL operates in the power T&D space, acquiring projects primarily Industry Power T&D
through TBCB. The company's business model focuses on developing, operating, and
maintaining power T&D networks under 35-year contracts. AESL generates fixed tariff-
based returns or RoA annually, ensuring a stable and predictable cash flow.
Scrip Details
Face Value (INR) 10.0
Adani Energy Solutions Ltd (AESL), a frontrunner in India’s private power transmission
Market Cap (INR Cr) 92,739
sector with a 30% market share and key distributor of power in Mumbai & Mundra, is
diversifying into the smart meter segment to drive growth. Despite stock volatility Price (INR) 772
following Hindenburg’s fresh allegations in Nov 2024, AESL has demonstrated No of Sh O/S (Cr) 120.1
resilience, supported by robust fundamentals and operational strength, including: 3M Avg Vol (000) 8,105.2
• Transmission: Since Apr 24, AESL augmented its transmission assets by adding: 52W H/L (INR) 1,348/588
o Khavda IV A: 602 ckm/4,500 MVA with an asset base of INR 40.9 bn. Dividend Yield (%) 0.0
o Khavda IV D: 816 ckm/4,500 MVA with an asset base of INR 34.6 bn.
o Navinal: 516 ckm/6,000 MVA with an asset base of INR 23.8 bn.
o Jamnagar: 941 ckm/3,000 MVA with an asset base of INR 38.2 bn. Shareholding (%) Sep 2024
o Mahan-Sipat transmission operational asset (673 ckm) through acquisition. Promoter 69.9
o As per the media reports, AESL won the largest TBCB bid for an HVDC line in Institution 24.1
Rajasthan in Dec 2024, with an asset base of INR 250 bn.
Public 6.0
• Smart Meter Push: Launched supply and installation across nine regions, TOTAL 100.0
generating INR 453 cr in revenue.

• Distribution business remains strong, delivering a 15% RoA and backed by a Price Chart
capex plan exceeding INR 10,000 cr over the next six years, which is expected to
drive significant EBITDA growth.
AESL Sensex

India’s transmission capacity is expected to grow from 523 kckm/1208 GVA in FY24 to
4,500 100,000
828 kckm/2093 GVA by FY34, driven by the government’s plans to double generation 4,000 90,000
capacity to 900 GW. This expansion involves an investment of INR 8.2 trillion in 3,500 80,000
3,000 70,000
transmission infrastructure over the next decade, with INR 2.3 trillion via private TBCB 60,000
2,500
50,000
projects. AESL, commanding ~30% of the private TBCB market, is well-positioned to 2,000
40,000
capitalize on these developments. Moreover, the government’s decision to allow 1,500 30,000
1,000 20,000
private companies to acquire urban power distribution licenses presents new
500 10,000
opportunities for AESL. 0 0
Apr-22

Apr-23

Apr-24
Dec-21

Dec-22

Dec-23

Dec-24
Aug-22

Aug-23

Aug-24
To fund its business expansion, AESL raised INR 8,373 cr via QIP in Aug 2024 at INR 976
per share—Adani Group’s first capital raise post-Hindenburg episode—attracting
strong interest from global and domestic investors. Over FY24-27E, AESL’s revenue,
EBITDA, and net profit are expected to grow at a CAGR of 19.8%, 31.0%, and 50.6%,
reaching INR 28,544 cr, INR 12,843 cr, and INR 3,881 cr, respectively. EBITDA and net
margins are projected to expand by 1060bps to 45% and 675bps to 13.6%.

Valuation call - AESL’s robust fundamentals, strategic initiatives, and favorable industry
dynamics reaffirm its long-term growth story. We recommend BUY with a DCF-based
price target of INR 1,696 (19.6X FY27 EV/EBITDA). At the CMP of INR 772 (11.2X FY27
EV/EBITDA), the stock represents 116.9% upside over a 24-month period.

Key consolidated financial data (INR Cr, unless specified)

Net Adj. Net EBITDA Adj Net EPS BVPS RoE RoIC P/E EV/EBITDA
EBITDA
Revenue Profit (%) (%) (₹) (₹) (%) (%) (X) (X)
FY23 13,293 5,553 1,256 41.8 9.5 10.5 107.2 10.7 9.1 73.8 22.4
FY24 16,607 5,711 1,137 34.4 6.8 9.5 114.1 9.0 8.4 81.5 22.3
FY25E 21,547 7,237 1,789 33.6 8.3 14.9 186.1 8.0 9.2 51.8 17.5
FY26E 24,238 10,441 3,068 43.1 12.7 25.5 211.7 12.6 11.9 30.2 12.9
FY27E 28,544 12,843 3,881 45.0 13.6 32.3 244.0 13.7 12.4 23.9 11.2
4|Page (23rd Dec 2024) For any further query, please email us on [email protected]
 Valuation

We have used the DCF model to value AESL since its TBCB contracts generate
significant cash over the next 35 years (typical life of a TBCB contract). We have
discounted back the future cash flows to FY27 and value the company at INR 1,675,
presenting an upside of 116.9% from the CMP of INR 772.

Fig in INR cr, unless specified FY27 FY28 FY29 FY30 FY35 FY40 FY45 FY50
FCFF (96) 3,182 5,912 15,975 18,804 18,010 17,336 16,681
Discount factor at 8.4% (X) 1.00 0.92 0.85 0.78 0.52 0.35 0.23 0.16
Discounted FCFF (96) 2,935 5,030 12,539 9,857 6,304 4,053 2,604
Total discounted FCFF 160,401
Terminal value at 3% growth 587,807
Present value of terminal value 91,771
Enterprise value 252,172
Less: Net Debt 51,008
Value of equity 201,164
Value per share (INR) 1,675

Our Bull and Bear Case Scenarios

We have prepared likely Bull and Bear case scenarios for the FY27 price, based on
revenue growth, EBITDA margins and EV/EBITDA multiples.
• Bull Case: We have assumed revenue of INR 30,000 cr (FY24-27E CAGR of
21.8%) and a EBITDA margin of 47% at a EV/EBITDA of 20X, which will result in
a Bull Case price target of INR 1,923 (an upside of 149.1% from CMP).
• Bear Case: We have assumed revenue of INR 20,000 cr (FY24-27E CAGR of
6.4%) and a EBITDA margin of 40% at a EV/EBITDA of 15X, which will result in
a Bear Case price target of INR 649 (a downside of 15.9% from CMP).

Bull & Bear Case Scenario

Revenue of INR 30,000 cr, EBITDA margin Bull Case Price

of 47% and 20X EV/EBITDA INR 1,923 per share

Revenue of INR 28,544 cr, EBITDA margin Target Price

of 45% and 19.6X EV/EBITDA INR 1,675 per share

Current price
INR 793 per share

Revenue of INR 20,000 cr, EBITDA margin Bear Case Price

of 40% and 15X EV/EBITDA INR 649 per share

Source: BSE & Ventura Research

r d
5|Page (23 Dec 2024) For any further query, please email us on [email protected]
 Consensus vs Ventura Estimates

Consensus vs Ventura FY24-27E

FY24 FY25E FY26E FY27E
Estimates CAGR (%)
Revenue (INR cr)
Consensus 16,607.4 19,898.6 23,002.7 27,578.9 18.4
YoY Growth (%) 24.9 19.8 15.6 19.9
Ventura Estimates 16,607.4 21,547.3 24,237.9 28,544.1 19.8
YoY Growth (%) 24.9 29.7 12.5 17.8
EBITDA (INR cr) & EBITDA margin (%)
Consensus 5,711.2 7,507.7 9,941.7 13,085.9 31.8
Consensus Margin (%) 34.4 37.7 43.2 47.4
Ventura Estimates 5,711.2 7,236.8 10,440.9 12,842.7 31.0
Ventura Margin (%) 34.4 33.6 43.1 45.0
Net Profit (INR cr) & Net margin (%)
Consensus 1,137.3 2,799.7 4,112.4 5,298.6 67.0
Consensus Margin (%) 6.8 14.1 17.9 19.2
Ventura Estimates 1,137.3 1,789.4 3,068.1 3,881.5 50.6
Ventura Margin (%) 6.8 8.3 12.7 13.6
Net Debt (INR cr)
Consensus 34,338.0 38,208.9 50,558.4 64,658.5 23.5
Ventura Estimates 34,338.0 34,238.0 41,940.5 51,008.3 14.1
Valuation
P/E Ratio (X)
Consensus 81.5 33.1 22.6 17.5
Ventura Estimates 81.5 51.8 30.2 23.9
EV/EBITDA Ratio (X)
Consensus 22.3 17.4 14.4 12.0
Ventura Estimates 22.3 17.5 12.9 11.2

6|Page (23rd Dec 2024) For any further query, please email us on [email protected]
 Strong growth outlook, improving profitability and healthy balance sheet could re-rate the valuation

1 year forward EV/EBITDA 1 year forward EV/EBITDA and its standard deviation

EV per sh 15.7x 24.2x Date Average Upper SD1

32.7x 41.2x 49.7x Upper SD2 Lower SD1 Lower SD2

5,000 120
4,500
100
4,000
3,500
80
3,000
2,500 60
2,000
40
1,500
1,000 20
500
0 0

Dec-19

Dec-20

Aug-21
Dec-21

Dec-22

Dec-23

Dec-24
Apr-19
Aug-19

Apr-20
Aug-20

Apr-21

Apr-22
Aug-22

Apr-23
Aug-23

Apr-24
Aug-24
Dec-19

Aug-20
Dec-20

Dec-21

Dec-22

Dec-23

Dec-24
Apr-21
Apr-19
Aug-19

Apr-20

Aug-21

Apr-22
Aug-22

Apr-23
Aug-23

Apr-24
Aug-24

(500)
(20)

Price performance - AESL vs PGCIL Despite strong growth of AESL, its valuation gap with
PGCIL has significantly reduced
AESL PGCIL
AESL EV/EBITDA divided by PGCIL EV/EBITDA
2,000
Equal valuation line of 1.0X
1,800
14
1,600

1,400 12

1,200 10

1,000 8
800
6
600
4
400

200 2

0 0
Dec-19

Dec-20

Aug-21
Dec-21

Aug-22
Dec-22

Aug-23
Dec-23

Dec-24
Apr-19
Aug-19

Apr-20
Aug-20

Apr-21

Apr-22

Apr-23

Apr-24
Aug-24
Aug-20
Aug-19
Dec-19

Dec-20
Apr-21
Aug-21
Dec-21

Aug-22
Dec-22

Aug-23
Dec-23

Aug-24
Dec-24
Apr-19

Apr-20

Apr-22

Apr-23

Apr-24

(200)

Source: Ventura Research

7|Page (23rd Dec 2024) For any further query, please email us on [email protected]
 Valuation and comparable metrics of domestic and global companies
EV/EBITDA P/E (X) EV/Sales (X) EV/EBIDTA (X) RoE (%) RoIC (%) Sales EBITDA Margin (%) Net Margin (%)
Company Name Mkt Cap Price to EBITDA
2025 2026 2027 2025 2026 2027 2025 2026 2027 2025 2026 2027 2025 2026 2027 2025 2026 2027 2025 2026 2027 2025 2026 2027
CAGR (X)
Domestic Peers (fig in INR cr, unless specified)
Adani Energy Solutions 92,739 772.0 0.4 51.8 30.2 23.9 5.9 5.6 5.0 17.5 12.9 11.2 8.0 12.1 13.2 9.0 11.7 12.2 21,547 24,238 28,544 33.6 43.1 45.0 8.3 12.7 13.6
Power Grid Corp 301,014 323.7 1.9 18.6 17.5 16.5 9.0 8.6 8.5 10.3 9.8 9.6 17.7 17.8 18.0 13.1 13.3 12.7 45,917 48,203 51,126 87.3 88.2 88.2 35.2 35.7 35.6
GE T&D 52,770 2,061.0 0.6 101.6 73.0 52.9 12.0 8.9 6.8 70.6 51.5 37.5 31.8 33.1 32.4 34.8 36.1 35.4 4,369 5,817 7,607 17.0 17.4 18.1 11.9 12.4 13.1
Tata Power 131,328 411.0 0.8 30.0 26.6 23.2 2.6 2.6 2.5 14.5 13.3 12.1 12.2 12.5 12.6 9.6 9.5 9.7 69,661 75,314 82,042 18.3 19.5 20.4 6.3 6.6 6.9
NTPC 326,244 336.5 0.8 14.9 13.4 12.4 2.9 2.7 2.6 9.7 8.9 8.4 12.9 13.2 13.2 10.4 10.9 10.4 193,326 206,839 219,424 29.5 30.3 31.2 11.4 11.8 12.0
KEC International 32,077 1,205.0 0.4 44.9 28.2 21.9 1.5 1.3 1.2 20.9 15.6 12.8 13.8 18.5 19.7 18.0 22.3 24.6 22,830 26,128 29,934 7.3 8.6 9.1 3.1 4.4 4.9
Kalpataru Projects 22,059 1,291.7 0.4 29.6 21.5 18.3 1.1 0.9 0.8 12.0 9.9 8.3 12.0 14.3 14.5 18.7 19.8 21.4 22,488 26,625 31,344 9.0 9.3 9.3 3.3 3.9 3.9
Torrent Power 81,582 1,619.0 0.8 34.8 31.2 28.6 3.1 2.9 2.9 16.7 15.4 13.9 16.3 16.0 15.4 15.6 14.3 13.4 30,233 33,471 36,061 18.5 19.0 20.8 7.8 7.8 7.9
CESC 24,832 187.3 0.3 15.8 14.2 12.6 2.1 2.1 2.0 10.1 9.5 8.7 12.8 13.0 13.3 10.5 10.8 11.7 17,544 18,572 19,889 21.3 21.9 22.8 9.0 9.4 9.9
Global Peers (fig in USD mn, unless specified)
Next Era Energy Inc 56,767 11.6 1.5 19.7 13.1 12.3 4.4 4.6 4.9 13.5 11.6 11.3 6.6 8.9 9.2 5.8 6.4 6.5 24,951 24,142 24,036 32.9 39.7 43.1 11.5 17.9 19.1
Duke Energy Corp 81,541 105.8 2.0 17.8 16.5 15.5 5.4 5.4 5.3 11.9 11.5 11.1 9.2 9.7 9.8 6.2 6.3 6.3 30,317 31,271 32,767 45.9 47.1 48.0 15.1 15.8 16.1
Southern Company 89,213 81.5 2.3 20.1 18.8 17.5 5.8 5.7 5.6 13.2 12.8 12.2 13.4 13.6 13.9 6.9 7.1 7.3 26,545 27,438 28,323 44.2 44.7 45.5 16.7 17.3 18.0
The National Grid PLC 56,454 57.8 1.5 19.6 13.1 12.3 4.4 4.6 4.9 13.4 11.6 11.3 5.3 7.6 7.8 5.2 6.0 6.0 24,951 24,142 24,036 32.9 39.7 43.1 11.5 17.9 19.1
SAUDI ELECTRICITY CO 18,631 4.5 1.0 5.1 6.4 5.4 4.0 3.6 3.3 14.6 8.4 7.6 7.8 10.1 10.6 3.8 5.7 5.5 22,825 24,272 25,653 27.4 43.0 43.0 16.1 11.9 13.4
EVERSOURCE ENERGY 20,577 56.2 0.9 12.7 11.8 11.0 3.9 3.7 3.7 12.1 11.0 10.7 10.2 10.4 10.6 6.2 6.8 7.0 12,262 12,893 13,202 32.4 33.7 34.8 13.2 13.5 14.1
EDISON INTERNATIONAL 30,298 78.3 0.9 15.8 13.6 12.7 3.8 3.7 3.6 9.9 9.0 8.7 13.4 14.2 14.3 7.1 8.1 8.4 17,341 18,092 18,861 38.2 41.1 41.9 11.1 12.3 12.6
CLP HOLDINGS LTD 20,747 8.2 0.6 14.0 13.4 13.2 2.5 2.5 2.4 8.7 8.5 8.4 10.8 10.9 10.7 9.5 9.8 9.6 11,069 11,192 11,437 29.1 29.3 29.2 13.4 13.8 13.8
P G & E CORP 51,148 19.2 0.5 17.6 15.9 14.7 4.3 4.3 4.2 11.2 10.2 9.7 8.2 8.3 8.2 5.8 6.3 6.4 24,700 25,690 26,494 38.4 41.6 43.7 11.8 12.5 13.2
ENDESA SA 22,188 21.0 0.5 11.5 10.9 10.4 1.2 1.3 1.3 6.0 5.9 5.7 23.5 22.9 22.1 17.3 16.6 16.6 26,674 26,028 24,839 20.5 21.6 23.4 7.2 7.8 8.6
XCEL ENERGY INC 39,529 66.4 1.2 19.9 18.0 16.3 4.6 4.7 4.6 12.1 11.7 11.0 9.7 10.0 10.3 5.8 6.0 6.2 14,715 15,610 16,463 38.1 40.0 42.1 13.5 14.1 14.7
ENTERGY CORP 31,385 73.2 1.4 20.2 18.6 16.3 4.7 4.7 4.7 11.9 11.4 10.8 10.3 10.6 11.3 6.7 6.8 7.0 12,690 13,350 14,118 39.4 41.0 43.4 12.2 12.7 13.6
PPL CORP 23,312 31.6 1.1 18.3 17.2 16.0 4.7 5.0 4.9 11.7 11.2 10.9 8.9 9.1 9.3 6.9 7.1 7.0 8,424 8,300 8,710 40.4 44.4 45.3 15.1 16.3 16.7
FIRSTENERGY CORP 22,557 39.1 0.7 14.7 13.5 12.6 3.4 3.4 3.4 10.5 9.8 9.4 12.4 12.7 13.0 7.8 8.1 8.2 13,497 13,995 14,465 32.4 34.3 36.1 11.4 11.9 12.4
FORTIS INC 20,478 41.2 1.7 18.2 17.2 16.1 5.1 4.9 4.8 11.3 11.0 10.5 7.4 7.7 7.9 6.4 6.5 6.7 8,361 8,891 9,283 45.1 45.2 46.0 13.4 13.4 13.7
AVANGRID INC 13,731 35.5 1.1 16.3 15.8 15.1 3.2 3.6 3.6 11.5 12.3 11.5 4.5 4.3 4.4 3.6 3.7 3.8 8,597 8,951 9,026 28.2 29.5 31.3 9.8 9.7 10.0
CK Infrastructure 17,399 6.9 4.3 16.0 15.1 14.3 23.6 22.9 22.3 52.3 49.8 47.6 6.5 6.8 7.0 1.8 1.9 1.9 793 814 835 45.1 45.9 46.8 136.9 142.0 146.2
TERNA-RETE ELETTRICA NAZIONA 15,812 7.9 1.3 14.5 15.6 14.5 7.4 7.8 7.7 10.6 11.3 10.9 14.2 12.6 13.1 8.7 7.6 7.6 3,790 3,882 4,215 69.3 68.9 70.2 28.7 26.2 25.8
EVERGY INC 13,900 60.5 1.5 15.7 14.9 14.0 4.7 4.7 4.7 10.5 10.1 9.7 8.9 9.1 9.1 6.6 6.8 6.9 5,841 6,011 6,232 44.9 46.3 47.9 15.1 15.5 15.9
AMERICAN ELECTRIC POWER 48,416 90.9 1.0 16.3 15.2 14.0 4.6 4.6 4.6 11.5 11.2 10.8 11.1 11.2 11.5 6.5 6.5 6.6 20,259 21,334 22,065 40.0 41.2 43.1 14.7 14.9 15.7
HYDRO ONE LTD 18,196 30.4 2.1 22.4 21.1 20.0 5.2 5.2 5.1 14.3 13.8 13.3 9.5 9.7 9.9 6.7 6.9 7.0 5,822 6,081 6,345 36.6 37.3 38.2 14.0 14.2 14.4
ALLIANT ENERGY CORP 14,921 58.2 1.5 19.3 18.0 16.6 6.1 6.1 6.1 14.0 13.5 13.1 11.5 11.7 11.9 6.3 6.3 6.2 4,147 4,316 4,453 43.5 45.1 46.7 18.7 19.2 20.2
TENAGA NASIONAL BHD 17,940 3.1 1.3 19.6 17.0 15.9 2.1 2.1 2.1 6.5 6.2 6.2 6.7 7.5 7.8 8.0 8.8 8.7 13,061 13,531 13,972 32.9 33.6 33.3 7.0 7.8 8.1
ENEL AMERICAS SA 9,450 0.1 0.3 6.2 9.1 7.2 0.9 0.9 0.8 3.1 2.8 2.6 9.7 6.5 7.7 13.7 14.9 15.8 13,527 13,395 13,947 30.5 32.2 32.0 11.3 7.8 9.4
EMERA INC 10,907 37.2 1.9 18.5 16.0 14.9 4.5 4.2 4.3 11.4 10.2 10.2 7.4 8.4 8.9 5.7 6.9 6.8 5,395 5,850 5,887 39.3 41.3 41.9 10.9 11.6 12.4
KOREA ELECTRIC POWER 9,111 14.2 0.1 3.7 2.1 2.0 1.5 1.4 1.3 6.4 5.3 5.1 8.8 13.5 12.5 5.0 7.0 7.1 65,124 68,169 69,636 23.7 26.5 26.6 3.7 6.4 6.6
ACCIONA SA 6,124 111.6 2.5 16.3 9.7 11.8 0.7 0.7 0.7 6.4 5.3 5.4 7.1 11.1 8.7 8.4 11.2 10.1 19,722 20,431 21,176 11.2 13.1 12.8 1.9 3.1 2.5
CENTRAIS ELETRICAS BRASILIER 13,028 5.6 0.4 10.9 8.3 6.0 3.1 3.0 2.7 5.7 5.3 4.4 6.0 7.5 9.8 10.3 11.2 12.8 6,321 6,323 6,815 55.4 56.4 60.1 18.9 24.7 32.0
NRG ENERGY INC 17,990 88.8 0.4 12.4 12.5 12.0 0.9 0.8 0.9 7.5 7.2 8.2 43.2 40.2 41.6 19.7 19.4 21.6 31,784 32,483 30,382 11.6 11.6 10.6 4.6 4.4 4.9
HK ELECTRIC 5,960 0.7 2.5 14.3 13.8 13.7 8.1 7.9 7.7 11.4 11.2 10.8 6.6 6.8 6.7 5.4 5.4 5.6 1,558 1,598 1,650 70.7 70.7 70.7 26.8 27.1 26.3
KANSAI ELECTRIC POWER 11,636 10.7 0.2 3.8 6.0 6.1 1.4 1.5 1.5 5.1 8.7 8.5 16.7 10.5 9.6 11.1 5.2 5.0 28,114 28,142 27,532 26.8 17.6 18.1 10.9 6.9 7.0
ELIA GROUP SA/NV 5,633 76.6 0.6 13.4 11.2 9.3 4.1 4.0 4.2 12.2 11.2 11.1 7.7 8.2 9.1 4.7 5.1 5.1 4,567 5,363 6,152 33.8 36.0 37.9 9.2 9.4 9.8
CHUBU ELECTRIC POWER 7,539 9.9 3.0 2.7 5.3 6.8 1.0 1.3 1.4 7.2 11.4 13.8 16.3 7.9 5.9 6.7 3.5 2.3 25,005 23,198 22,553 14.3 11.3 9.9 11.2 6.1 4.9
PINNACLE WEST CAPITAL 9,554 84.0 1.4 15.9 16.9 14.5 3.9 3.9 3.9 9.9 10.0 9.4 9.1 8.2 9.5 6.2 6.0 6.5 4,895 5,011 5,328 38.8 39.4 41.3 12.3 11.3 12.4
BKW AG 8,579 162.5 1.0 14.3 13.6 12.3 1.9 1.8 1.8 8.2 8.0 7.4 10.4 10.2 10.6 12.5 12.1 12.7 5,100 5,225 5,424 23.2 23.0 24.0 11.7 12.0 12.9
OGE ENERGY CORP 8,142 40.5 1.3 18.6 17.8 16.7 4.7 4.5 4.6 10.5 10.0 9.8 9.4 9.6 9.9 7.4 7.8 7.8 2,832 2,982 3,092 44.4 45.3 46.6 15.4 15.3 15.7
MANILA ELECTRIC COMPANY 8,870 7.9 0.6 12.1 11.6 10.9 1.1 1.2 1.1 8.3 8.3 7.5 27.4 25.4 25.7 24.1 19.4 18.8 8,231 8,584 9,090 13.8 13.8 14.9 8.9 8.9 9.0
ORIGIN ENERGY LTD 11,178 6.5 0.1 12.2 12.6 14.4 1.2 1.3 1.3 11.1 6.1 6.5 14.4 14.0 11.9 10.3 14.4 12.7 10,580 10,244 10,366 10.7 21.2 19.6 8.7 8.7 7.5
INTERCONEXION ELECTRICA SA 4,086 3.7 0.7 7.4 7.0 6.6 3.2 3.0 2.7 5.2 4.7 4.2 15.3 14.8 14.6 17.4 17.4 18.4 3,182 3,266 3,429 60.9 63.9 65.1 17.3 17.8 18.1
MERCURY NZ LTD 4,739 3.4 3.7 26.9 33.8 27.1 2.8 3.0 3.0 12.6 12.1 11.1 5.8 5.1 6.3 5.5 7.4 8.2 2,077 1,943 1,974 22.5 24.9 27.1 8.5 7.2 8.9

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 Revenue growth and margin expansion deserves re-rating in valuation

25.0
KEC Int

22.5
NRG Energy Kalpataru
20.0 Manila Electric
Interconexion Electrica
17.5
Endesa SA
FY27 RoIC (%)

ENEL Americas
15.0
Torrent Power
Origin Energy BKW AG
AESL
12.5 Centrais PGCIL
CESC NTPC
Tata Power Tenaga Nasional Acciona SA
10.0 OGE Energy Next Era
CPL Holdings Edison Int Hydro One
Korea Electric Firstenergy Terna-Rete Evergy Inc Southern Co
7.5 PPL Corp Emera Inc
Eversource Energy Entergy Fortis Inc
XCEL
Pinnacle (W) Alliant Energy Duke Energy
5.0 PG&E Elia Group
Saudi Elec National Grid HK Electric
Kansai Electric American Electric Avangrid Inc
2.5
0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6
FY27E EV/EBITDA divided by EBITDA CAGR (X)

35
GET&D

30

25
FY24-27E Revenue CAGR (%)

20 AESL

Kalpataru
15 KEC Int Tata Power

10
Torrent Power NTPC
5 PGCIL
CESC

0
0 10 20 30 40 50 60 70 80 90 100

(5)
FY27E EBITDA margin (%)

Bubble size represents the size of the companies’ revenue

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 AESL’s Financial Summary
Fig in INR Cr (unless specified) FY22 FY23 FY24 FY25E FY26E FY27E FY28E FY29E FY30E FY31E FY32E FY33E FY34E FY35E
Power distribution revenue 6,966 8,592 10,173 12,260 14,247 16,298 18,419 20,613 22,885 25,240 27,683 30,220 32,857 35,600
YoY Growth (%) 15.2 23.3 18.4 20.5 16.2 14.4 13.0 11.9 11.0 10.3 9.7 9.2 8.7 8.3
Share in total revenue (%) 61.9 64.6 61.3 56.9 58.8 57.1 53.6 51.1 46.7 48.7 50.3 51.7 53.0 54.2
Power transmission revenue 3,469 3,945 5,114 7,110 7,412 7,989 9,500 10,889 15,833 16,071 16,676 17,336 18,051 18,821
YoY Growth (%) 11.1 13.7 29.6 39.0 4.2 7.8 18.9 14.6 45.4 1.5 3.8 4.0 4.1 4.3
Share in total revenue (%) 30.8 29.7 30.8 33.0 30.6 28.0 27.7 27.0 32.3 31.0 30.3 29.7 29.1 28.7
Smart meter revenue 291 985 1,280 2,800 4,760 6,920 8,000 8,000 8,000 8,000 8,000 8,000
YoY Growth (%) 238.7 29.9 118.8 70.0 45.4 15.6 0.0 0.0 0.0 0.0 0.0
Share in total revenue (%) 1.8 4.6 5.3 9.8 13.9 17.2 16.3 15.4 14.5 13.7 12.9 12.2
Trading revenue 822 756 1,030 1,193 1,300 1,457 1,675 1,890 2,323 2,479 2,662 2,853 3,054 3,265
YoY Growth (%) 7.9 6.0 6.7 6.2 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0
Share in total revenue (%) 7.3 5.7 6.2 5.5 5.4 5.1 4.9 4.7 4.7 4.8 4.8 4.9 4.9 5.0
Revenue from operations 11,258 13,293 16,607 21,547 24,238 28,544 34,354 40,312 49,042 51,790 55,021 58,410 61,963 65,686
YoY Growth (%) 13.4 18.1 24.9 29.7 12.5 17.8 20.4 17.3 21.7 5.6 6.2 6.2 6.1 6.0
Power Generation & Distribution Cost 4,666 5,979 6,488 7,527 8,423 9,606 10,885 12,197 13,766 15,099 16,503 17,964 19,483 21,065
Power G&D Cost to Sales (%) 41.4 45.0 39.1 34.9 34.8 33.7 31.7 30.3 28.1 29.2 30.0 30.8 31.4 32.1
Net movement in RDA (682) (1,036) 460 665 0 0 0 0 0 0 0 0 0 0
Net movement in RDA to Sales (%) (6.1) (7.8) 2.8 3.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Employee Cost 885 987 952 1,149 1,212 1,427 1,718 2,016 2,452 2,589 2,751 2,920 3,098 3,284
Employee Cost to Sales (%) 7.9 7.4 5.7 5.3 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0
Other Expenses 1,500 1,809 2,996 4,969 4,162 4,668 5,223 6,040 7,145 7,656 8,224 8,817 9,437 10,085
Other Expenses to Sales (%) 13.3 13.6 18.0 23.1 17.2 16.4 15.2 15.0 14.6 14.8 14.9 15.1 15.2 15.4
EBITDA 4,889 5,553 5,711 7,237 10,441 12,843 16,529 20,060 25,679 26,446 27,543 28,708 29,944 31,252
EBITDA Margin (%) 43.4 41.8 34.4 33.6 43.1 45.0 48.1 49.8 52.4 51.1 50.1 49.1 48.3 47.6
PAT 1,918 2,316 1,196 359 3,153 3,982 5,840 7,687 11,697 12,598 13,883 15,261 16,728 18,344
PAT Margin (%) 17.0 17.4 7.2 1.7 13.0 13.9 17.0 19.1 23.9 24.3 25.2 26.1 27.0 27.9
Net Profit 1,205 1,256 1,137 283 3,068 3,881 5,720 7,545 11,524 12,416 13,690 15,056 16,510 18,113
Net Margin (%) 10.7 9.5 6.8 1.3 12.7 13.6 16.6 18.7 23.5 24.0 24.9 25.8 26.6 27.6

Adjusted EPS 10.0 10.5 9.5 2.4 25.5 32.3 47.6 62.8 95.9 103.4 114.0 125.3 137.4 150.8
P/E (X) 77.0 73.8 81.5 327.3 30.2 23.9 16.2 12.3 8.0 7.5 6.8 6.2 5.6 5.1
Adjusted BVPS 57.1 97.8 105.2 177.3 202.8 235.1 282.8 345.6 441.5 544.9 658.8 784.1 921.6 1,072.4
P/BV (X) 13.5 7.9 7.3 4.4 3.8 3.3 2.7 2.2 1.7 1.4 1.2 1.0 0.8 0.7
Enterprise Value 123,920 124,177 127,077 126,977 134,679 143,747 150,911 156,459 152,166 143,991 135,121 125,266 114,321 102,125
EV/EBITDA (X) 25.3 22.4 22.3 17.5 12.9 11.2 9.1 7.8 5.9 5.4 4.9 4.4 3.8 3.3

Net Worth 6,857 11,749 12,642 21,298 24,366 28,247 33,967 41,513 53,037 65,453 79,142 94,198 110,708 128,821
Return on Equity (%) 17.6 10.7 9.0 1.3 12.6 13.7 16.8 18.2 21.7 19.0 17.3 16.0 14.9 14.1
Capital Employed 39,727 45,948 49,650 59,561 71,037 83,570 96,170 109,618 117,465 122,297 126,476 132,045 138,093 143,796
Return on Capital Employed (%) 7.0 7.2 5.3 5.3 8.3 8.8 10.1 10.9 13.6 13.4 13.4 13.4 13.3 13.2
Invested Capital 38,038 43,187 46,980 55,536 66,306 79,256 92,139 105,233 112,464 116,705 121,525 126,725 132,291 138,207
Return on Invested Capital (%) 9.1 9.1 8.4 9.2 11.9 12.4 14.1 15.2 19.0 18.8 18.7 18.6 18.5 18.4

Cash Flow from Operations 4,097 3,777 6,038 838 8,343 9,682 11,960 14,848 17,676 21,515 21,958 22,596 23,293 24,012
Cash Flow from Investing (3,948) (4,699) (4,943) (5,082) (11,870) (13,765) (13,403) (14,039) (6,988) (7,350) (7,965) (8,572) (9,182) (9,797)
Cash Flow from Financing (235) 923 (543) 6,954 4,161 3,553 1,004 (613) (10,305) (13,647) (14,719) (13,746) (13,723) (14,528)
Net Cash Flow (86) 1 551 2,709 633 (530) (439) 195 383 518 (727) 279 388 (313)
Free Cash Flow 1,809 1,420 2,467 (6,282) (225) (96) 3,182 5,912 15,975 18,804 18,010 17,336 16,681 15,935
FCF to Revenue (%) 16.1 10.7 14.9 (29.2) (0.9) (0.3) 9.3 14.7 32.6 36.3 32.7 29.7 26.9 24.3
FCF to EBITDA (%) 37.0 25.6 43.2 (86.8) (2.2) (0.7) 19.2 29.5 62.2 71.1 65.4 60.4 55.7 51.0
FCF to Net Profit (%) 150.2 113.0 216.9 (2,217.1) (7.3) (2.5) 55.6 78.4 138.6 151.5 131.6 115.1 101.0 88.0
FCF to Net Worth (%) 26.4 12.1 19.5 (29.5) (0.9) (0.3) 9.4 14.2 30.1 28.7 22.8 18.4 15.1 12.4

Total Debt 32,870 34,199 37,009 38,263 46,671 55,323 62,203 68,106 64,428 56,844 47,333 37,847 27,385 14,974
Net Debt 31,181 31,438 34,338 34,238 41,941 51,008 58,172 63,720 59,427 51,252 42,382 32,527 21,583 9,386
Net Debt to Equity (X) 4.5 2.7 2.7 1.6 1.7 1.8 1.7 1.5 1.1 0.8 0.5 0.3 0.2 0.1
Net Debt to EBITDA (X) 6.4 5.7 6.0 4.7 4.0 4.0 3.5 3.2 2.3 1.9 1.5 1.1 0.7 0.3
Interest Coverage Ratio (X) 1.5 1.4 1.4 1.4 1.9 1.9 2.2 2.5 3.2 3.6 4.4 5.5 7.5 12.0

Fundamental scores
Altman Z Score 0.9 1.0 1.2 1.8 1.7 1.6 1.6 1.5 1.7 1.8 1.9 2.0 2.1 2.4
Piotroski F-score 6.0 6.0 4.0 6.0 5.0 5.0 6.0 6.0 6.0 7.0 6.0 7.0 7.0 7.0
Beneish M-score (2.3) (2.2) (2.4) (0.8) (2.2) (2.1) (2.1) (2.1) (2.0) (2.3) (2.2) (2.2) (2.2) (2.1)
Source: ACE Equity, Company Reports & Ventura Research
Absolute net profit in FY25 is expected to be INR 283 cr (considering the exceptional loss of INR 1506 cr reported in Q1FY25). Adjusted net
profit for FY25 is expected to be INR 1789 cr

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 Adani Energy Solutions Ltd SWOT Analysis in a nutshell

Adani Energy
Solutions Ltd

Investment
Growth Drivers Key Challenges New Trends
Themes

India's transmission capacity to AESL has secured 5 high-yield

AESL has started a pilot project
grow from 523 kckm/1208 GVA transmission projects, slated
Power T&D is a highly regulated of district cooling, under which
in FY24 to 828 kckm/2093 GVA to become operational over the
market, which involves regular the company will provide the
by FY34. With INR 8.2 trillion next 5 years. Consequently, we
negotiations with Ministries cooling services to commercial
investment planned, including anticipate transmission
and power T&D authorities. buildings, data centers,
INR 2.3 trillion via private TBCB, revenue to grow at a robust
airports, hospitals, etc.
AESL is poised to benefit. CAGR of 20.7% over FY24-30E.

Government is inviting private AESL obtained approval from Mundra's industrial

companies to bid for power Power T&D is a capital intensive CERC for an inter-state energy investments (in cement, green
distribution licenses. AESL is business and its cash flow is trading license. This empowers H2, copper, etc.) are set to drive
exploring opportunities and distributed in 35 years. AESL to offer power solutions significant power demand,
applied for Navi Mumbai/Thane, Arranging initial capital at a to corporate & industrial (C&I) positioning AESL to achieve a
Gautam Buddha Nagar and competitive rate is a challenge. clients, unlocking a significant 14.5% CAGR in distribution
Mundra sub-district. long-term growth opportunity. revenue over FY24-30E.

Over 133 mn smart meters

AESL secured an equity capital
licenses have been awarded so
of INR 8,373 cr through a QIP,
far (AESL won contracts for 22.8
which will be used as a growth
mn smart meter, 17% share) and
capital and will reduce
23.8 mn are at negotiation
additional debt burden on the
stage, which still leaves the
balance sheet.
untapped market of 141 mn.

11 | P a g e ( 2 3 r d D e c 2 0 2 4 ) Foronany
For any further query, please email us further query, please email us on [email protected]
[email protected]
 AESL – A frontrunner in the domestic power T&D space

AESL is a key player in India’s power T&D sector, with a 30% share in the private
transmission market and distribution rights in Mumbai and Mundra. Its transmission
business ensures stable tariffs, while distribution yields 15% RoA. The company is
diversifying into smart meters, securing 9 contracts worth INR 272 bn for 22.8 mn units
across 5 Indian states. The company has also ventured into cooling solutions.

AESL's emerging ventures, including district cooling solutions and a CERC-approved

energy trading license for customized power solutions targeting corporate and industrial
customers, are set to diversify its revenue streams significantly. However, these verticals
are not factored into our current forecast. Any cash flow contribution from these
businesses could present an upside to our target price.

AESL’s business structure

24 - Fixed Tariff assets

Power Transmission

5 - RAB Assets

AEML (Mumbai power distribution in

400 sq km)

MUL (Mundra power distribution in

Power Distribution 85 sq km)

Adani Energy
Solutions Ltd Parallel licensing under approval for
Navi Mumbai/Thane, Gautam Buddha
Nagar, Mundra sub-district

22.8 mn smart meters in 5 Indian

Smart Meters states with a contract value of INR
272 bn

District Cooling BOT and BOOM opportunities

CERC-approved energy
trading

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 Strong fundamentals fueling a resilient growth

AESL witnesses strong revenue growth and profit margin expansion due to high
yielding assets in the transmission business, incremental capex in Mumbai &
Mundra distribution and the rollout of smart meters.

Expansion in transmission business, incremental capex in Revenue performance

Mumbai/Mundra distribution and smart meters rollout are
Distribution Transmission Smart Meter
set to boost revenue growth and profit margins.
Others YoY Growth (%)
Over FY24-27E, AESL’s revenues are expected to grow at a
CAGR of 19.8% to INR 28,544 cr, primarily due to: 30,000 35
25,000 30
• Power transmission revenue is anticipated to grow at a 25
20,000
16% CAGR to INR 7,989 cr, fueled by a robust pipeline 20
15,000
of under-construction projects and the expected 15
award of new TBCB projects. This growth will be further 10,000 10
supported by a focus on high-capacity KVA and HVDC 5,000 5
lines, which offer superior yields. 0 0
FY22 FY23 FY24 FY25E FY26E FY27E
• Power distribution revenue is projected to grow at a
17% CAGR to INR 16,298 cr, driven by increasing power
consumption in Mumbai and strong growth prospects
in Mundra. The Mundra region's substantial investment Segmental revenue share (%)
pipeline across industries like cement, steel, copper,
Distribution Transmission Smart Meter Others
aluminium, green hydrogen, and renewable energy
manufacturing (wind turbines and solar) will generate 100
7 6 6 6 5 5
2 5 5 10
significant power demand, which AESL is well-
80 30
positioned to meet. 31 31 33 31 28
60
• The smart meter vertical is expected to generate INR
2,800 cr in revenue by FY27, driven by the full 40
deployment of 22.8 mn smart meters. This rollout will 62 65 61 57 59 57
establish a long-term, recurring income stream for the 20
company.
0
High yield transmission lines, regulated distribution FY22 FY23 FY24 FY25E FY26E FY27E
returns, strong margins in smart meters and QIP-led
finance cost savings to boost profitability

• EBITDA and net earnings are expected to grow faster Profitability performance
than revenue due to higher yields on new transmission EBITDA Net Profit
lines (especially HVDC lines), regulated returns from
EBITDA Margin (%) Net Margin (%)
distribution assets and 85-90% margins from smart
meter vertical. 14,000 50
12,000
• Additionally, the company raised INR 8,373 cr in August 40
10,000
2024, which is being allocated toward under- 30
8,000
construction projects. This strategic deployment will
6,000 20
reduce debt requirements and result in significant
4,000
savings on financing costs. 10
2,000
• As a result, EBITDA and net earnings are expected to 0 0
grow at a CAGR of 31% to INR 12,843 cr and 50.6% to FY22 FY23 FY24 FY25E FY26E FY27E
INR 3,881 cr respectively, while EBITDA and net margins
are expected to improve by 1060bps to 45% and
675bps to 13.6% respectively

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 Power Transmission – Leading market share in TBCB based private power
transmission space

AESL is the largest private transmission company in India with 24,085 ckm of transmission
lines, 75,186 MVA of power transformation capacity and an asset base of INR 797 bn.

AESL’s power transmission business size

Transmission line Transformation Asset base
Particulars
length (ckm) capacity (MVA (INR bn)
Fixed tariff (TBCB) operational projects 11,576 19,025 189
Fixed tariff (TBCB) under-construction projects 5,890 34,896 233
TOTAL 17,466 53,921 422

Regulated return (RoA) operational projects 6,539 16,590 299

Regulated return (RoA) under-construction projects 80 4,675 76
TOTAL 6,619 21,265 375

Total operational projects (TBCB+RoA) 18,115 35,615 488

Total under-construction projects (TBCB+RoA) 5,970 39,571 309
TOTAL 24,085 75,186 797
#Excluding Rajasthan HVDC line of INR 250 bn asset base

Significant transmission operational base and strong AESL's power transmission revenue performance
under-construction pipeline provides revenue visibility
Revenue YoY Growth (%)
During FY22-24, AESL’s transmission revenue grew at a
18,000 50
CAGR of 21.4% to INR 5,114 cr.
16,000
40
The segment’s revenue is projected to grow at a 16% CAGR, 14,000
reaching INR 7,989 cr by FY27, and accelerate further with 12,000
30
10,000
a 25.6% CAGR to INR 15,833 cr by FY30.
8,000
20
The growth will be fueled by a robust pipeline of under- 6,000
construction projects and the expected award of new 4,000 10
2,000
TBCB projects. This growth will be further supported by a
0 0
focus on high-capacity KVA and HVDC lines, which offer
FY22 FY23 FY24 FY25E FY26E FY27E FY28E FY29E FY30E
superior yields.

Power Distribution – Steady growth in Mumbai distribution and strong

growth prospects in Mundra

Under its power distribution business, AESL has licenses for Mumbai and Mundra regions.
The company has formed two subsidiaries to operate these geographies:

• Adani Electricity Mumbai Ltd (AEML), which distributes electricity to over 3.20 mn
connections (households and industrial). AEML operates at a RoA of 15.5%.

• Mundra Utility Ltd (MUL), which distributes electricity in Mundra SEZ & port region.
MUL operates at a RoA of 14%.

Both the licenses are regulated asset-based where the RoA is fixed irrespective of cost
volatility, thereby protecting the profits of the asset.

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 Growth drivers for Mumbai distribution (AEML) AESL's power consumption units (mn KWH)

• The marked increase in connections within the Mumbai units (mn KWH) Mundra units (mn KWH)
Mumbai region (from 3 mn in FY19 to 3.2 mn in Q2FY25) YoY Growth (%)
highlights the strong electrification of informal
25,000 20
households.
20,000
• The launch of the Network Operation Center (NOC) in 15
Mumbai enables proactive identification of power 15,000
10
disruptions and early detection of issues, preventing 10,000
major outages. This enhances operational efficiency 5
5,000
and availability, paving the way for improved profit
margins. 0 0
FY22 FY23 FY24 FY25E FY26E FY27E FY28E FY29E FY30E
• As of Sept 2024, AEML achieved a 39% renewable
energy mix and is targeting 60% by FY27, positioning
Mumbai among the few global metropolises with such
a significant share of renewable energy in its power Regionwise power consumption share (%)
supply mix. Share of Mumbai (%) Share of Mundra (%)

100
Growth drivers for Mundra distribution (MUL)
80
• The Mundra SEZ region has substantial investment
60
pipeline across industries like cement, steel, copper,
aluminium, green hydrogen, and renewable energy 40
manufacturing (wind turbines and solar) will generate
significant power demand, which AESL is well- 20
positioned to meet.
0
• Although the current power usage in Mundra is less FY22 FY23 FY24 FY25E FY26E FY27E FY28E FY29E FY30E
than in Mumbai, the rapid industrial development is
likely to lead to a significant surge in power demand
soon. We are targeting 30% power consumption AESL's power distribution revenue performance
contribution from Mundra, while the remaining is
expected to come from Mumbai region. Revenue YoY Growth (%)

25,000 25

Strong revenue growth in forecasted period 20,000 20

• During FY22-24, AESL’s distribution revenue grew at a 15,000 15

CAGR of 21.4% to INR 5,114 cr.
10,000 10
• The segment’s revenue is projected to grow at a 16%
CAGR, reaching INR 7,989 cr by FY27, and accelerate 5,000 5
further with a 25.6% CAGR to INR 15,833 cr by FY30. 0 0
FY22 FY23 FY24 FY25E FY26E FY27E FY28E FY29E FY30E

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 Power Distribution – Fast emerging business segment is showing
promising development and growth

Through the Revamped Distribution Sector Scheme (RDSS), the government aims to deploy 250 mn smart meters across
India by the year 2026, supported by a funding allocation of INR 2.2 trillion. Over 133 mn smart meters licenses have been
awarded so far (AESL won contracts for 22.8 mn smart meter, 17% market share) and 23.8 mn are at negotiation stage, which
still leaves the untapped market of 141 mn smart meters.

Smart metering opportunity in India and share of AESL

AESL’s smart meter portfolio

Contract value No of smart Per meter Month of

Counter party Geography
(INR bn) meters (mn) charges (INR) award
Brihanmumbai Electricity Supply & Transport (BEST) Mumbai 13.0 1.1 11,818 Sep-22
Assam Power Distribution Company Ltd Tejpur, Mangaldoi & North Lakhimpur 8.4 0.8 10,500 Feb-23
Andhra Pradesh Eastern Power Distribution Co Ltd Srikakulam, Vizianagaram, Visakhapatnam & Godavari 13.0 1.1 11,818 Jun-Dec 2023
Andhra Pradesh Central Power Distribution Co Ltd Krishna, Guntur & Prakasam 20.8 1.7 12,235 Jun-Nov 2023
Andhra Pradesh Southern Power Distribution Co Ltd Nellore, Chittoor, Kadapa, Anantapuram, Kurnoolam & Kurnool 18.0 1.3 13,846 Jun-Sep 2023
Maharashtra State Electricity Distribution Co Ltd Bhandup, Kalyan & Konkan 96.7 8.1 11,938 Aug-23
Maharashtra State Electricity Distribution Co Ltd Baramati & Pune 62.9 5.2 12,096 Aug-23
North Bihar Power Distribution Co Ltd Siwan, Suran, Gopalganj, Vaishali & Samastipur 31.0 2.8 11,071 Aug-23
Uttarakhand Power Corporation Ltd Kumaon 8.1 0.7 11,571 Dec-23
TOTAL 271.9 22.8 11,925.4

Per meter charges includes the sourcing cost, O&M expenses and profits of the company, out of which the sourcing cost is capitalized by AESL
All the contracts have been awarded for 120 months and are based on DBFOOT (Design-Build-Finance-Own-Operate-Transfer) type

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 AESL smart meter segment performance

AESL's smart meter revenue performance Number of smart meters

Revenue YoY Growth (%) 60

9,000 300 50
8,000
250 40
7,000
6,000 200
30
5,000
150
4,000 20
3,000 100
2,000 10
50
1,000
0 0 0
FY25E FY26E FY27E FY28E FY29E FY30E FY25E FY26E FY27E FY28E FY29E FY30E

Although AESL has secured a contract for 22.8 mn smart meters, we anticipate the
company will win additional contracts for 27 mn meters from upcoming bids for
141 mn smart meters. This would bring AESL’s total smart meter base to 50 mn in
the coming years.

Upcoming verticals – District cooling and interstate energy trading license

to provide customized power solutions to corporate & industrial clients

District cooling – The system generates chilled water at a central plant and distributes it
to multiple buildings through an underground pipe network for space and process
cooling. The company will fully fund the system's capex, reducing project costs for real
estate developers and lowering cooling costs for end-users by 20-25%. The main target
market will be commercial real estate, offices, industrial units, data centers and airports

Energy trading license - The company has secured approval from CERC for transferring
the inter-state energy trading license from Adani Enterprises Ltd (group company). This
license will enable AESL to provide customized power solutions to C&I customers

Both businesses are still in the pilot phase and have yet to generate commercial
revenue. Consequently, we have excluded this segment’s financials from our
projections.

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 Key strength of AESL

Strong project execution skills

AESL has a Project Management & Assurance Group (PMAG) which specializes in end-to-
end project integration covering the entire lifecycle from concept to commissioning. It
leverages a team of 90 professionals with over 2,000+ man-years of experience in
managing projects of varying scales.

AESL’s end-to-end project execution skill

Astute capital management

Power transmission projects require significant capital investments, making long-term

debt financing essential. The repayment period for this debt, aligned with the 30-35-year
lifespan of the assets, ensures enhanced operating cash flows over time. AESL benefits
from a fully regulated power transmission portfolio, providing either a fixed RoE or a fixed
annual tariff. This structure guarantees stable cash flows, timely debt repayments, and
eliminates default risk.

AESL’s project capital management

18 | P a g e ( 2 3 r d D e c 2 0 2 4 ) For any further query, please email us on [email protected]

 Capex and its % of revenue Increased Capex in the Medium Term Driven by New
Projects
Capex Capex as % of revenue
• Higher Capex Allocation: Expenditure on under-
16,000 60 construction transmission projects and smart meter
14,000 50 deployment across 5 states is expected to drive an
12,000 increase in capex during the forecast period.
10,000 40
• Rising Capex as a Revenue Proportion: Capex as a
8,000 30
percentage of revenue is projected to grow from 33%
6,000 20 in FY24 to 45-50% over FY25-FY27E, fueled by:
4,000
10 o Power Transmission Projects: INR 15,000 cr
2,000
allocated.
0 0
FY22 FY23 FY24 FY25E FY26E FY27E
o Power Distribution: INR 5,300 cr planned.
o Smart Meter Deployment: INR 13,500 cr
committed.
Cash flow performance
Operating Cash Flow to Strengthen, While Heavy Capex
CFO FCFF
Pressures FCF
CFO to EBITDA (%) FCFF to Net Profit (%)
• Robust Operating Cash Flow: New transmission
15,000 500 projects and the smart meter segment are expected
10,000 0 to generate strong EBITDA, resulting in improved
(500) operating cash flow.
5,000 • Short-Term FCF Impact: Significant capex on projects
(1,000)
0 is likely to constrain FCF generation over the next 3-4
(1,500) years. However, a recovery in FCF is anticipated post
FY22 FY23 FY24 FY25E FY26E FY27E
(5,000) (2,000) the construction phase, as projects begin
(10,000) (2,500) contributing to cash flows.

Strategic Capital Management and Equity Funding of INR Debt and balance sheet health
8,373 Cr to Alleviate Debt Burden
Total Debt Net Debt
• Debt Optimization Amid Growth Projects: While Net Debt to Equity (X) Net Debt to EBITDA (X)
under construction transmission projects and smart
60,000 7
meter procurement may elevate debt levels, the
50,000 6
company’s strengthening EBITDA and improving
40,000 5
operating cash flows are expected to reduce the debt
4
burden progressively. 30,000
3
• Utilization of Recent QIP: The recently raised INR 20,000 2
8,373 cr through QIP will serve as growth capital, 10,000 1
freeing up operating cash flows for timely debt 0 0
repayment upon maturity. FY22 FY23 FY24 FY25E FY26E FY27E
• No Significant Near-Term Debt Maturity: With no
substantial debt obligations in the near term, the Return ratios
company’s operating cash flows can be entirely
directed towards business expansion. Net Worth Invested Capital RoE (%) RoIC (%)

Enhanced Return Ratios Through Improved Liquidity and 100,000 20

Reduced Debt 80,000
15
• Strengthening Financial Position: Reduced debt
60,000
levels, robust liquidity, and increasing cash flows are 10
contributing to the improved return profile. 40,000
• Improved RoE and RoIC: The RoE and RoIC are 5
20,000
projected to rise significantly by 474bps to 13.7% and
399bps to 12.4%, respectively, reflecting enhanced 0 0
financial efficiency. FY22 FY23 FY24 FY25E FY26E FY27E

19 | P a g e ( 2 3 r d D e c 2 0 2 4 ) For any further query, please email us on [email protected]

 AESL long term debt maturity

Debt maturity (INR cr) Average maturity (INR cr)

12,000
10,127
10,000

8,000

Average annual debt maturity

6,000 5,140 of INR 2,604 cr

4,000 3,581

2,000 1,153 1,368 1,097 1,066 1,095

892
523
0
FY25 (Oct-Mar) FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34

Cash flows and EBITDA are sufficient to cater to long term Cumulative debt maturities vs cumulative operating
debt maturities over the next 10 years cash flows

• AESL faces no significant debt maturities in the near Cumulative debt maturity (INR cr) Cumulative CFO (INR cr)
term, ensuring a stable financial position. The

152,709
200,000

129,416
cumulative operating cash flow is significantly higher

106,820
than the cumulative debt maturities over the next 10 150,000

84,862
years.

63,346
45,671
100,000
• The company’s average annual debt maturity over the

30,823

26,042
24,947
23,881
20,300
19,203
18,863

next 10 years stands at INR 2,604 cr, while its current

9,181

9,076
7,708
6,555

50,000
1,415

EBITDA generation exceeds this amount by more than

838
523

2x. This strong EBITDA coverage effectively shields 0

AESL from any undue debt repayment pressures. FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34

20 | P a g e ( 2 3 r d D e c 2 0 2 4 ) For any further query, please email us on [email protected]

 Ventura Business Quality Score
Key Criteria Score Risk Comments
Management & Leadership
The management is of high quality. It has been able to deliver on its
Management Quality 9 Low
guidance; investor-friendly with timely updates on developments

The promoters are currently holding 69.9% stake in the company and
Promoters Holding Pledge 10 Low
there is no pledging

The average experience of directors is >30 years with significant

Board of Directors Profile 8 Low
experience in their respective sectors and expert areas
Industry Consideration
India is doubling its power generation and transmission capacities.
Half of this expansion will be allocated to private companies through
Industry Growth 8 Low TBCB route, where AESL has a strong presence. Similarly, the
government is inviting private companies for power distribution,
which will open a significant opportunity for private players.

Power T&D business is subject to extensive regulatory risk which

Regulatory Environment or Risk 8 Low includes several laws, rules and directives issued by the government
and regulatory authorities.

Power T&D is a capital intensive business. It also requires expertise

Entry Barriers / Competition 8 Low and strong B2G relations, which takes time. We believe that these are
strong entry barriers.

Business Prospects
Strong growth in power generation and transmission in India along
New Business / Client Potential 8 Low with opportunities in the power distribution space offers significant
growth prospects to AESL.
AESL has ventured into smart meters installation and O&M. The
company has bagged an order for 21.1 mn smart meters and there is a
Business Diversification 8 Low
significant opportunity for more such orders in the coming years. It
will significantly diversify the business.
AESL has 30% market share in TBCB based private power
Market Share Potential 8 Low transmission industry and it is also expanding its presence in the
power distribution space.
Strong project execution skills and operational excellence has
Margin Expansion Potential 8 Low
helped the company in improving its profitability.

Rise in profitability along with strong business growth is expected to

Earnings Growth 8 Low
accelerate earnings growth in the coming years.

Valuation and Risk

AESL has a strong balance sheet, and it is supported by the fixed cash
Balance Sheet Strength 8 Low
flow structure from its regulated assets.

As on 30th Sep 2024, AESL had a consolidated net debt of INR 32,831
Debt Profile 6 Medium cr and reported a net debt to equity of 2.8X and net debt to EBITDA of
5.7X. This debt is backed by power T&D asset base of INR 47,140 cr.

Power T&D business require regular capex towards new asset

FCF Generation 6 Medium
acquisition and O&M cost, which slows down the FCFF growth.

AESL is in the growth phase and therefore, the company is not paying
Dividend Policy 5 Medium
dividend to its shareholders.
Total Score The management is of high quality. It has been able to deliver on its
9 Low
Ventura Score (%) guidance; investor-friendly with timely updates on developments

Source: Company Reports & Ventura Research

21 | P a g e ( 2 3 r d D e c 2 0 2 4 ) For any further query, please email us on [email protected]

 Management Team

Key person Designation Details

He holds an engineering degree from Delhi College of Engineering along with PG degree in cost
accountancy from ICWAI and PGDBM & Executive Program from IIM Ahmedabad. He has +43 years of
Mr. Anil Sardana Managing Director experience in the power & infrastructure space, particularly in the energy and telecom sector having
managed complex transactions, developments and operations. Piror to joining Adani Group he has
worked with NTPC (for 7 years), BSES (for 14 years) and Tata Power (for 18 years).

He graduated with Bachelor's degree in Electrical Engineering from Birla Viswakarma Mahavidhyalaya
Engineering College in 1994 and has an MBA degree in Finance from G.H. Patel PG Institute of
Mr. Kandarp Patel CEO Business Management in 1997. He has more than two decades of multi-faceted experience in the
areas of Power Trading, Fuel Management, Legal and Regulatory and Commercial aspects of the
Power Business.

He is a qualified Chartered Accountant and Cost Accountant with over 24 years of work experience
Mr. Kunjal Mehta CFO across various sectors, such as Power, Steel, Ports and logistics, Technology & ITES sectors. In his
previous positions, he has worked with Adani Electricity, Adani Ports & SEZ and Essar Steel.

Source: Company Reports

Key Risks & Concerns

• AESL has 13 under-construction power transmission projects (11 TBCB fixed
tariff and 2 RAB based project, excluding Rajasthan HVDC). Such projects
typically require substantial funding and a long gestation period of 2-5 years
before the commencement of commercial operations. Any delay due to
operational or macro reason could impact the projects’ future cash flows.
• Private participation in the TBCB based bidding picked up since FY16 and it
is also attracting more private companies due to its fixed cash flow model.
Though AESL enjoys more than ~20% market share in this space, increased
competitive pressure could adversely affect the pricing and ability of AESL
to successfully bid for projects.
• TBCB based fixed tariff transmission lines generate a fixed annuity-based
cash flow. In the inflationary environment and surge in O&M cost could
impact the profitability of AESL.
• AESL is regularly investing in its power distribution assets (AEML and MUL)
to enhance the infrastructure and improve its equity portion to generate
better returns. However, any slowdown in the power demand in these areas
could materially impact the company’s return on invested capital.
• Power T&D business is subject to extensive regulatory risk which includes
several laws, rules and directives issued by the government and regulatory
authorities. To conduct transmission business, the company must obtain
various licenses, permits and approvals. In addition, the operations are
subject to continued review and audit by the governing bodies.

22 | P a g e ( 2 3 r d D e c 2 0 2 4 ) For any further query, please email us on [email protected]

 AESL’s quarterly and annual performance
Fig in INR Cr (unless specified) FY19 FY20 FY21 FY22 FY23 Q1FY24 Q2FY24 Q3FY24 Q4FY24 FY24 Q1FY25 Q2FY25 FY25E FY26E FY27E
Power distribution revenue 4,270 7,676 6,048 6,966 8,592 2,738 2,480 2,560 2,396 10,173 3,373 3,014 12,260 14,247 16,298
YoY Growth (%) 79.8 (21.2) 15.2 23.3 23.7 14.6 21.7 13.5 18.4 23.2 21.5 20.5 16.2 14.4
Share in total revenue (%) 58.5 67.2 60.9 61.9 64.6 74.7 67.5 56.1 50.9 61.3 62.7 48.7 56.9 58.8 57.1
Power transmission revenue 2,193 2,815 3,122 3,469 3,945 926 1,017 1,265 1,906 5,114 1,762 2,303 7,110 7,412 7,989
YoY Growth (%) (29.9) 28.4 10.9 11.1 13.7 10.8 17.2 7.8 78.5 29.6 90.2 126.4 39.0 4.2 7.8
Share in total revenue (%) 30.0 24.7 31.5 30.8 29.7 25.3 27.7 27.7 40.5 30.8 32.8 37.2 33.0 30.6 28.0
Smart meter revenue 291 291 76 377 985 1,280 2,800
YoY Growth (%) 238.7 29.9 118.8
Share in total revenue (%) 1.8 1.4 6.1 4.6 5.3 9.8
Trading revenue 842 925 757 822 756 0 177 738 114 1,030 167 490 1,193 1,300 1,457
YoY Growth (%) 13.0 8.8 8.3 7.9 6.0 0.0 5.1 19.3 2.7 6.7 3.3 9.2 6.2 6.0 6.0
Share in total revenue (%) 11.5 8.1 7.6 7.3 5.7 0.0 4.8 16.2 2.4 6.2 3.1 7.9 5.5 5.4 5.1
Revenue from operations 7,305 11,416 9,926 11,258 13,293 3,664 3,674 4,563 4,707 16,607 5,379 6,184 21,547 24,238 28,544
YoY Growth (%) 85.2 56.3 (13.0) 13.4 18.1 17.0 13.0 28.5 40.2 24.9 46.8 68.3 29.7 12.5 17.8
Power Generation & Distribution Cost 3,130 4,622 3,643 4,666 5,979 1,460 1,441 2,205 1,383 6,488 1,804 2,251 7,527 8,423 9,606
Power G&D Cost to Sales (%) 42.8 40.5 36.7 41.4 45.0 39.8 39.2 48.3 29.4 39.1 33.5 36.4 34.9 34.8 33.7
Net movement in RDA (81) 233 (583) (682) (1,036) 304 154 57 (56) 460 594 72 665 0 0
Net movement in RDA to Sales (%) (1.1) 2.0 (5.9) (6.1) (7.8) 8.3 4.2 1.2 (1.2) 2.8 11.0 1.2 3.1 0.0 0.0
Employee Cost 587 973 931 885 987 243 270 259 179 952 276 293 1,149 1,212 1,427
Employee Cost to Sales (%) 8.0 8.5 9.4 7.9 7.4 6.6 7.3 5.7 3.8 5.7 5.1 4.7 5.3 5.0 5.0
Other Expenses 907 1,335 1,402 1,500 1,809 388 458 571 1,579 2,996 1,054 1,853 4,969 4,162 4,668
Other Expenses to Sales (%) 12.4 11.7 14.1 13.3 13.6 10.6 12.5 12.5 33.5 18.0 19.6 30.0 23.1 17.2 16.4
EBITDA 2,762 4,254 4,533 4,889 5,553 1,269 1,350 1,471 1,621 5,711 1,651 1,715 7,237 10,441 12,843
EBITDA Margin (%) 37.8 37.3 45.7 43.4 41.8 34.6 36.7 32.2 34.4 34.4 30.7 27.7 33.6 43.1 45.0
PAT 559 706 1,872 1,918 2,316 183 285 348 383 1,196 (1,189) 773 359 3,153 3,982
PAT Margin (%) 7.7 6.2 18.9 17.0 17.4 5.0 7.8 7.6 8.1 7.2 (22.1) 12.5 1.7 13.0 13.9
Net Profit 559 742 1,224 1,205 1,256 176 277 325 364 1,137 (823) 675 283 3,068 3,881
Net Margin (%) 7.7 6.5 12.3 10.7 9.5 4.8 7.5 7.1 7.7 6.8 (15.3) 10.9 1.3 12.7 13.6

Adjusted EPS 4.7 6.2 10.2 10.0 10.5 1.5 2.3 2.7 3.0 9.5 (6.8) 5.6 2.4 25.5 32.3
P/E (X) 165.8 125.0 75.8 77.0 73.8 81.5 327.3 30.2 23.9
Adjusted BVPS 38.6 43.4 50.7 57.1 97.8 105.2 177.3 202.8 235.1
P/BV (X) 20.0 17.8 15.2 13.5 7.9 7.3 4.4 3.8 3.3
Enterprise Value 115,367 117,654 121,065 123,920 124,177 127,077 126,977 134,679 143,747
EV/EBITDA (X) 41.8 27.7 26.7 25.3 22.4 22.3 17.5 12.9 11.2

Net Worth 4,635 5,220 6,090 6,857 11,749 12,642 21,298 24,366 28,247
Return on Equity (%) 12.1 14.2 20.1 17.6 10.7 9.0 1.3 12.6 13.7
Capital Employed 28,180 32,745 35,880 39,727 45,948 49,650 59,561 71,037 83,570
Return on Capital Employed (%) 4.4 6.0 7.6 7.0 7.2 5.3 5.3 8.3 8.8
Invested Capital 27,263 30,135 34,416 38,038 43,187 46,980 55,536 66,306 79,256
Return on Invested Capital (%) 6.9 10.2 9.3 9.1 9.1 8.4 9.2 11.9 12.4

Cash Flow from Operations 2,591 5,437 3,784 4,097 3,777 6,038 838 8,343 9,682
Cash Flow from Investing (3,138) (5,643) (4,025) (3,948) (4,699) (4,943) (5,082) (11,870) (13,765)
Cash Flow from Financing 38 1,250 (745) (235) 923 (543) 6,954 4,161 3,553
Net Cash Flow (509) 1,045 (986) (86) 1 551 2,709 633 (530)
Free Cash Flow 2,319 4,140 1,632 1,809 1,420 2,467 (6,282) (225) (96)
FCF to Revenue (%) 31.7 36.3 16.4 16.1 10.7 14.9 (29.2) (0.9) (0.3)
FCF to EBITDA (%) 83.9 97.3 36.0 37.0 25.6 43.2 (86.8) (2.2) (0.7)
FCF to Net Profit (%) 414.6 558.1 133.3 150.2 113.0 216.9 (2,217.1) (7.3) (2.5)
FCF to Net Worth (%) 50.0 79.3 26.8 26.4 12.1 19.5 (29.5) (0.9) (0.3)

Total Debt 23,545 27,525 29,791 32,870 34,199 37,009 38,263 46,671 55,323
Net Debt 22,629 24,916 28,326 31,181 31,438 34,338 34,238 41,941 51,008
Net Debt to Equity (X) 4.9 4.8 4.7 4.5 2.7 2.7 1.6 1.7 1.8
Net Debt to EBITDA (X) 8.2 5.9 6.2 6.4 5.7 6.0 4.7 4.0 4.0
Interest Coverage Ratio (X) 1.4 1.3 1.5 1.5 1.4 1.4 1.4 1.9 1.9

Fundamental scores
Altman Z Score 0.5 0.6 0.7 0.9 1.0 1.2 1.8 1.7 1.6
Piotroski F-score 4.0 7.0 5.0 6.0 6.0 4.0 6.0 5.0 5.0
Beneish M-score (1.2) (2.4) (2.0) (2.3) (2.2) (2.4) (0.8) (2.2) (2.1)
Source: ACE Equity, Company Reports & Ventura Research
Absolute net profit in FY25 is expected to be INR 283 cr (considering the exceptional loss of INR 1506 cr reported in Q1FY25). Adjusted net
profit for FY25 is expected to be INR 1789 cr

23 | P a g e ( 2 3 r d D e c 2 0 2 4 ) For any further query, please email us on [email protected]

 AESL’s consolidated financials & projections
Fig in INR Cr (unless specified) FY23 FY24 FY25E FY26E FY27E Fig in INR Cr (unless specified) FY23 FY24 FY25E FY26E FY27E
Income Statement Per share data & Yields
Revenue 13,292.7 16,607.4 21,547.3 24,237.9 28,544.1 Adjusted EPS (INR) 10.5 9.5 2.4 25.5 32.3
YoY Growth (%) 18.1 24.9 29.7 12.5 17.8 Adjusted Cash EPS (INR) 23.8 24.3 20.0 46.7 57.6
Power Cost (incl. net change in RDA) 4,943.7 6,948.4 8,191.9 8,422.8 9,606.4 Adjusted BVPS (INR) 107.2 114.1 186.1 211.7 244.0
RM Cost to Sales (%) 37.2 41.8 38.0 34.8 33.7 Adjusted CFO per share (INR) 31.4 50.3 7.0 69.4 80.6
Employee Cost 986.7 951.7 1,149.1 1,211.9 1,427.2 CFO Yield (%) 4.1 6.5 0.9 9.0 10.4
Employee Cost to Sales (%) 7.4 5.7 5.3 5.0 5.0 Adjusted FCF per share (INR) 11.8 20.5 (52.3) (1.9) (0.8)
Other Expenses 1,809.2 2,996.1 4,969.4 4,162.3 4,667.8 FCF Yield (%) 1.5 2.7 (6.8) (0.2) (0.1)
Other Exp to Sales (%) 13.6 18.0 23.1 17.2 16.4
EBITDA 5,553.2 5,711.2 7,236.8 10,440.9 12,842.7 Solvency Ratio (X)
Margin (%) 41.8 34.4 33.6 43.1 45.0 Total Debt to Equity 2.7 2.7 1.7 1.8 1.9
YoY Growth (%) 13.6 2.8 26.7 44.3 23.0 Net Debt to Equity 2.4 2.5 1.5 1.6 1.7
Depreciation & Amortization 1,607.7 1,776.1 2,116.3 2,543.9 3,038.9 Net Debt to EBITDA 5.7 6.0 4.7 4.0 4.0
EBIT 3,945.5 3,935.1 5,120.5 7,897.0 9,803.8
Margin (%) 29.7 23.7 23.8 32.6 34.3 Return Ratios (%)
YoY Growth (%) 14.0 (0.3) 30.1 54.2 24.1 Return on Equity 10.7 9.0 8.0 12.6 13.7
Other Income 1,583.3 611.0 538.3 563.6 617.0 Return on Capital Employed 7.2 5.3 5.3 8.3 8.8
Finance cost 2,781.5 2,766.5 3,575.4 4,246.7 5,099.7 Return on Invested Capital 9.1 8.4 9.2 11.9 12.4
Interest Coverage (X) 1.4 1.4 1.4 1.9 1.9
Exceptional Item 0.0 0.0 (1,506.0) 0.0 0.0 Working Capital Ratios
PBT 2,747.3 1,779.6 577.4 4,213.8 5,321.1 Payable Days (Nos) 49 38 28 28 28
Margin (%) 20.7 10.7 2.7 17.4 18.6 Inventory Days (Nos) 4 6 6 6 6
YoY Growth (%) 15.3 (35.2) (67.6) 629.8 26.3 Receivable Days (Nos) 39 34 77 77 77
Tax Expense 431.1 584.0 218.4 1,060.6 1,339.3 Net Working Capital Days (Nos) (6) 2 55 55 55
Tax Rate (%) 15.7 32.8 37.8 25.2 25.2 Net Working Capital to Sales (%) (1.6) 0.6 15.1 15.1 15.1
PAT 2,316.2 1,195.6 359.0 3,153.2 3,981.7
Margin (%) 17.4 7.2 1.7 13.0 13.9 Valuation (X)
YoY Growth (%) 20.7 (48.4) (70.0) 778.2 26.3 P/E 73.8 81.5 51.8 30.2 23.9
Min Int/Sh of Assoc (1,059.9) (58.3) (75.7) (85.1) (100.3) P/BV 7.2 6.8 4.1 3.6 3.2
Net Profit 1,256.3 1,137.3 283.4 3,068.1 3,881.5 EV/EBITDA 22.4 22.3 17.5 12.9 11.2
Margin (%) 9.5 6.8 1.3 12.7 13.6 EV/Sales 9.3 7.7 5.9 5.6 5.0
YoY Growth (%) 4.3 (9.5) (75.1) 982.8 26.5
Cash Flow Statement
Balance Sheet PBT 2,747.3 1,779.6 577.4 4,213.8 5,321.1
Share Capital 1,115.5 1,115.5 1,201.3 1,201.3 1,201.3 Adjustments 1,536.3 5,146.4 3,633.0 5,591.0 6,342.9
Total Reserves 11,760.3 12,587.6 21,158.0 24,226.1 28,107.6 Change in Working Capital (75.5) (304.4) (3,154.2) (401.5) (642.5)
Shareholders Fund 12,875.8 13,703.1 22,359.3 25,427.4 29,308.8 Less: Tax Paid (431.1) (584.0) (218.4) (1,060.6) (1,339.3)
Long Term Borrowings 31,330.4 33,559.6 35,000.0 43,000.0 51,000.0 Cash Flow from Operations 3,777.0 6,037.6 837.8 8,342.8 9,682.2
Deferred Tax Assets / Liabilities 1,424.3 1,612.4 1,612.4 1,612.4 1,612.4 Net Capital Expenditure (4,702.2) (5,429.5) (9,343.2) (11,746.1) (13,594.2)
Other Long Term Liabilities 723.5 979.0 1,270.2 1,428.8 1,682.6 Change in Investments 3.5 486.5 4,260.8 (124.2) (170.8)
Long Term Trade Payables 32.8 37.4 48.5 54.6 64.3 Cash Flow from Investing (4,698.7) (4,943.0) (5,082.4) (11,870.2) (13,765.0)
Long Term Provisions 527.7 630.2 761.0 802.5 945.1 Change in Borrowings (145.3) 2,309.1 2,156.0 8,407.5 8,652.2
Total Liabilities 46,914.5 50,521.7 61,051.3 72,325.6 84,613.2 Less: Finance Cost (2,781.5) (2,766.5) (3,575.4) (4,246.7) (5,099.7)
Net Block 32,645.1 38,919.7 46,146.7 55,348.8 65,904.2 Proceeds from Equity 3,850.0 0.0 8,373.1 0.0 0.0
Capital Work in Progress 6,200.4 3,002.7 0.0 0.0 0.0 Buyback of Shares 0.0 0.0 0.0 0.0 0.0
Intangible assets under development 0.0 0.0 0.0 0.0 0.0 Dividend Paid 0.0 (85.8) 0.0 0.0 0.0
Non Current Investments 312.9 323.8 420.1 472.6 528.5 Cash flow from Financing 923.2 (543.2) 6,953.7 4,160.8 3,552.5
Long Term Loans & Advances 1,782.1 1,525.4 1,979.1 2,226.2 2,621.8 Net Cash Flow 1.5 551.4 2,709.0 633.3 (530.3)
Other Non Current Assets 4,084.3 5,148.7 6,680.2 7,514.3 8,849.4 Forex Effect 0.0 0.0 0.0 0.0 0.0
Net Current Assets 1,889.6 1,601.4 5,825.2 6,763.7 6,709.4 Opening Balance of Cash 189.1 190.6 742.1 3,451.1 4,084.4
Total Assets 46,914.5 50,521.7 61,051.3 72,325.6 84,613.2 Closing Balance of Cash 190.5 742.0 3,451.1 4,084.4 3,554.1
Source: Company Reports & Ventura Research
Absolute net profit in FY25 is expected to be INR 283 cr (considering the exceptional loss of INR 1506 cr reported in Q1FY25). Adjusted net
profit for FY25 is expected to be INR 1789 cr

24 | P a g e ( 2 3 r d D e c 2 0 2 4 ) For any further query, please email us on [email protected]

 Disclosures and Disclaimer

Ventura Securities Limited (VSL) is a SEBI registered intermediary offering broking, depository and portfolio management services to clients. VSL is member of BSE, NSE
and MCX-SX. VSL is a depository participant of NSDL. VSL states that no disciplinary action whatsoever has been taken by SEBI against it in last five years except
administrative warning issued in connection with technical and venial lapses observed while inspection of books of accounts and records. Ventura Commodities Limited,
Ventura Guaranty Limited, Ventura Insurance Brokers Limited and Ventura Allied Services Private Limited are associates of VSL. Research Analyst (RA) involved in the
preparation of this research report and VSL disclose that neither RA nor VSL nor its associates (i) have any financial interest in the company which is the subject matter
of this research report (ii) holds ownership of one percent or more in the securities of subject company (iii) have any material conflict of interest at the time of
publication of this research report (iv) have received any compensation from the subject company in the past twelve months (v) have managed or co-managed public
offering of securities for the subject company in past twelve months (vi) have received any compensation for investment banking merchant banking or brokerage
services from the subject company in the past twelve months (vii) have received any compensation for product or services from the subject company in the past twelve
months (viii) have received any compensation or other benefits from the subject company or third party in connection with the research report. RA involved in the
preparation of this research report discloses that he / she has not served as an officer, director or employee of the subject company. RA involved in the preparation of
this research report and VSL discloses that they have not been engaged in the market making activity for the subject company. Our sales people, dealers, traders and
other professionals may provide oral or written market commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions expressed
herein. We may have earlier issued or may issue in future reports on the companies covered herein with recommendations/ information inconsistent or different those
made in this report. In reviewing this document, you should be aware that any or all of the foregoing, among other things, may give rise to or potential conflicts of
interest. We may rely on information barriers, such as "Chinese Walls" to control the flow of information contained in one or more areas within us, or other areas, units,
groups or affiliates of VSL. This report is for information purposes only and this document/material should not be construed as an offer to sell or the solicitation of an
offer to buy, purchase or subscribe to any securities, and neither this document nor anything contained herein shall form the basis of or be relied upon in connection
with any contract or commitment whatsoever. This document does not solicit any action based on the material contained herein. It is for the general information of the
clients / prospective clients of VSL. VSL will not treat recipients as clients by virtue of their receiving this report. It does not constitute a personal recommendation or
take into account the particular investment objectives, financial situations, or needs of clients / prospective clients. Similarly, this document does not have regard to
the specific investment objectives, financial situation/circumstances and the particular needs of any specific person who may receive this document. The securities
discussed in this report may not be suitable for all investors. The appropriateness of a particular investment or strategy will depend on an investor's individual
circumstances and objectives. Persons who may receive this document should consider and independently evaluate whether it is suitable for his/ her/their particular
circumstances and, if necessary, seek professional/financial advice. And such person shall be responsible for conducting his/her/their own investigation and analysis of
the information contained or referred to in this document and of evaluating the merits and risks involved in the securities forming the subject matter of this document.
The projections and forecasts described in this report were based upon a number of estimates and assumptions and are inherently subject to significant uncertainties
and contingencies. Projections and forecasts are necessarily speculative in nature, and it can be expected that one or more of the estimates on which the projections
and forecasts were based will not materialize or will vary significantly from actual results, and such variances will likely increase over time. All projections and forecasts
described in this report have been prepared solely by the authors of this report independently of the Company. These projections and forecasts were not prepared with
a view toward compliance with published guidelines or generally accepted accounting principles. No independent accountants have expressed an opinion or any other
form of assurance on these projections or forecasts. You should not regard the inclusion of the projections and forecasts described herein as a representation or
warranty by VSL, its associates, the authors of this report or any other person that these projections or forecasts or their underlying assumptions will be achieved. For
these reasons, you should only consider the projections and forecasts described in this report after carefully evaluating all of the information in this report, including
the assumptions underlying such projections and forecasts. The price and value of the investments referred to in this document/material and the income from them
may go down as well as up, and investors may realize losses on any investments. Past performance is not a guide for future performance. Future returns are not
guaranteed and a loss of original capital may occur. Actual results may differ materially from those set forth in projections. Forward-looking statements are not
predictions and may be subject to change without notice. We do not provide tax advice to our clients, and all investors are strongly advised to consult regarding any
potential investment. VSL, the RA involved in the preparation of this research report and its associates accept no liabilities for any loss or damage of any kind arising out
of the use of this report. This report/document has been prepared by VSL, based upon information available to the public and sources, believed to be reliable. No
representation or warranty, express or implied is made that it is accurate or complete. VSL has reviewed the report and, in so far as it includes current or historical
information, it is believed to be reliable, although its accuracy and completeness cannot be guaranteed. The opinions expressed in this document/material are subject
to change without notice and have no obligation to tell you when opinions or information in this report change. This report or recommendations or information
contained herein do/does not constitute or purport to constitute investment advice in publicly accessible media and should not be reproduced, transmitted or published
by the recipient. The report is for the use and consumption of the recipient only. This publication may not be distributed to the public used by the public media without
the express written consent of VSL. This report or any portion hereof may not be printed, sold or distributed without the written consent of VSL. This document does
not constitute an offer or invitation to subscribe for or purchase or deal in any securities and neither this document nor anything contained herein shall form the basis
of any contract or commitment whatsoever. This document is strictly confidential and is being furnished to you solely for your information, may not be distributed to
the press or other media and may not be reproduced or redistributed to any other person. The opinions and projections expressed herein are entirely those of the
author and are given as part of the normal research activity of VSL and are given as of this date and are subject to change without notice. Any opinion estimate or
projection herein constitutes a view as of the date of this report and there can be no assurance that future results or events will be consistent with any such opinions,
estimate or projection. This document has not been prepared by or in conjunction with or on behalf of or at the instigation of, or by arrangement with the company or
any of its directors or any other person. Information in this document must not be relied upon as having been authorized or approved by the company or its directors
or any other person. Any opinions and projections contained herein are entirely those of the authors. None of the company or its directors or any other person accepts
any liability whatsoever for any loss arising from any use of this document or its contents or otherwise arising in connection therewith. The information contained herein
is not intended for publication or distribution or circulation in any manner whatsoever and any unauthorized reading, dissemination, distribution or copying of this
communication is prohibited unless otherwise expressly authorized. Please ensure that you have read “Risk Disclosure Document for Capital Market and Derivatives
Segments” as prescribed by Securities and Exchange Board of India before investing in Securities Market.

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