Adani Energy Solutions Q1 profit doubles, stock hits highest level since Hindenburg rout
ADVERTISEMENT
Adani Energy Solutions Ltd (AESL) shares climbed 3.44% on Tuesday to hit a 52-week high of ₹1,789, their highest level since the Hindenburg Research report triggered a sharp selloff in Adani Group stocks in January 2023, after the company reported more than doubling of its June-quarter net profit.
The stock touched an intraday high of ₹1,789, a level it had not seen since the Hindenburg report was published on January 24, 2023. While the stock remains well below its pre-Hindenburg peak of over ₹2,700, Tuesday's rally stresses the steady recovery in investor confidence, supported by strong earnings and the company's expanding presence across transmission, distribution and smart metering businesses.
Profit more than doubles
Adani Energy Solutions reported a 124.25% year-on-year jump in consolidated net profit to ₹1,149 crore for the quarter ended June 30, compared with ₹512 crore a year earlier.
Revenue from operations rose 42.4% to ₹9,711 crore from ₹6,819 crore, while EBITDA increased 30% to ₹3,008.37 crore from ₹2,314.50 crore.
However, EBITDA margin narrowed to 30.98% from 33.94% in the year-ago quarter, as revenue growth outpaced the increase in operating profit. The company did not specify the reasons for the margin contraction in its earnings statement.
Regulatory accounting swing boosts earnings
Apart from strong operating performance, the company's earnings received a major boost from a sharp turnaround in regulatory deferral accounting.
Adani Energy Solutions reported regulatory deferral income of ₹28.55 crore during the quarter, compared with a regulatory deferral expense of ₹503.89 crore in the corresponding quarter last year. As a result, profit before tax rose to ₹1,441.04 crore from ₹658.05 crore a year ago.
Before accounting for regulatory deferrals, profit before tax stood at ₹1,412.49 crore, compared with ₹1,161.94 crore in the year-ago period, indicating that the reversal in regulatory deferral charges contributed materially to the sharp year-on-year increase in reported earnings.
Smart metering acquisition strengthens growth story
The company also announced that it has signed a binding securities purchase and subscription agreement to acquire IntelliSmart Infrastructure Pvt Ltd, a smart metering joint venture between the National Investment and Infrastructure Fund (NIIF) and Energy Efficiency Services Ltd (EESL), for ₹3,050 crore.
The acquisition, subject to regulatory approvals, will strengthen Adani Energy Solutions' position as India's largest smart metering platform with more than 4.7 crore smart meters under management.
Segment-wise, the company's Energy Solutions Platform business reported revenue of ₹1,906.83 crore, up sharply from ₹209.71 crore a year earlier, reflecting the rapid scale-up of its newer businesses alongside its core transmission operations.
Adani Energy Solutions, formerly Adani Transmission, was among the worst-hit Adani Group companies after the Hindenburg report sparked a rout in the conglomerate's listed stocks in January 2023. The stock is still trading much below its pre-Hindenburg highs, however, the latest rally suggests investors are increasingly focusing on the company's improving fundamentals, healthy earnings trajectory and expanding presence across transmission, distribution, smart metering and integrated energy solutions.