Adani Transmission on Monday reported a consolidated net profit of ₹478 crore for the December quarter of 2022, up 73% year-on-year, aided by a one-time income of ₹240 crore from a regulatory order.

Revenue rose 16% year-over-year to ₹3,037 crore for the third quarter compared with ₹2,623 crore in the corresponding period a year ago.

The double digit growth in revenue was led by new transmission lines becoming operational and a positive trend in energy demand, according to its stock exchange filing.

The company operationalised a 371 circuit kilometre (ckm) line in Q3 FY23, taking its total transmission network at 18,795 ckm.

"Jam Khambhaliya Transco (JKTL) and WRSS XXI (A) lines were fully commissioned," the filing says, adding that the transmission system availability was 99.75%.

Consolidated operational EBITDA (Earnings before interest, taxes, depreciation, and amortisation) increased to ₹1,318 crore in the third quarter, the filing says.

"ATL is constantly evolving and is already a significant player in the T&D sector. ATL’s growth trajectory remains firm despite the challenging macroeconomic environment. Our pipeline of projects and recently operationalised assets will further strengthen our pan-India presence and consolidate our position as the largest private sector transmission and distribution company in India," says Anil Sardana, managing director, Adani Transmission.

"ATL is consistently benchmarking to be the best-in-class and is pursuing disciplined growth with strategic and operational de-risking, capital conservation, ensuring high credit quality, and business excellence with high governance standards. The journey towards a robust ESG framework and practising a culture of safety is integral to our pursuit of enhanced long-term value creation for all our stakeholders," Sardana adds.

The Gautam Adani-led company plans to reduce its overall promoter leverage. About 11.77 million shares of Adani Transmission, representing 1.4% of promoters' holding, will be released.

However, shares of Adani Transmission fell 10% to ₹1,256 apiece on Monday. The stock has dropped more than 50% on a year-to-date basis.

According to Moody's, Adani Transmission's investment-grade credit profile reflects the predictable cash flow from its portfolio of high-quality transmission and distribution (T&D) assets in India (Baa3 stable), most of which are regulated. The group's solid operating track record and the presence of a payment pooling mechanism for interstate transmission lines reduces ATL's exposure to counterparty risk, the ratings agency says.

The rating is constrained, however, by ATL's high financial leverage, says Moody's. "We expect ATL's consolidated funds from operations (FFO)/net debt to decline as additional debt is incurred to fund its committed projects. However, post March 2024, we expect FFO/net debt to recover above the minimum tolerance level of 7.5% set for its Baa3 ratings on a sustained basis. The long term improvement in ATL's credit metrics will primarily be driven by the incremental cash flow from its developing greenfield projects as they are commissioned," it says.

Adani Transmission market cap

Adani Transmission Q3 results: Profit up 73% to ₹478 cr