Shares of Gautam Adani-led Adani Transmission fell as much as 3.5% on Tuesday after the power utility reported an 85% year-on-year rise in its net profit for the quarter ended March.

The stock opened at its previous closing price of ₹832 but soon slipped 3.5% to hit a low of ₹792.40 apiece on the National Stock Exchange (NSE). The Adani Group company's market cap dropped to around ₹89,600 crore.

The counter hit its 52-week high of ₹4,236 on September 16, 2022. However, the stock slipped to its 52-week low of ₹631.50 on March 1, 2023, weeks after U.S. short sellers Hindenburg Research released its report.

On a year-to-date basis, the Adani stock is down 69%.

The drop in Adani Transmission's share price also comes ahead of its exclusion from the Morgan Stanley Capital International (MSCI) index from June 1, 2023. Earlier this month, MSCI had said it would exclude Adani Transmission and Adani Total Gas from the MSCI India Standard Index, as part of its quarterly index review.

The consolidated net profit of Adani Transmission rose to ₹440 crore in the fourth quarter, lower than the ₹717.5-crore consensus estimate of analysts tracked by Bloomberg.

The increase in profit was primarily driven by one-time income of ₹148 crore from regulatory order in the transmission business and aided by a mid-term true-up order by the regulator in Adani Electricity Mumbai.

The power transmission company’s revenue from operations grew 17% year-on-year to ₹3,031 crore in Q4 FY23 compared with ₹2,582 crore in the year-ago quarter. Operational earnings before interest, taxes, depreciation, and amortisation (EBITDA) rose 28% to ₹1,570 crore.

Consolidated revenue in Q4 FY23 and FY23 witnessed double-digit growth on account of new transmission lines becoming operational and an uptick in energy consumption, the power utility says in a stock exchange filing.

Consolidated EBITDA increased 23% year-on-year to ₹1,706 crore in the fourth quarter.

“Adani Transmission is well positioned to deliver exponential growth, and we are working towards fulfilling our nation’s massive electricity needs and strengthening our position as a world class utility. We are accelerating the transition to a sustainable and reliable grid and are committed to our pursuit of energizing and ensuring continuous and reliable power supply across all regions through our assets in India. Our focus remains strong on cashflow generation, operational excellence, and governance,” says Adani Group chairman Gautam Adani.

According to the company, the transmission business revenue growth in Q4 was driven by newly commissioned lines, and distribution revenue increased on account of a consistent uptick in energy demand.

During the quarter, Transmission EBITDA grew by 9% to ₹872 crore, and distribution EBITDA jumped 43% to ₹834 crore. Q4 profit in the transmission business grew 11% to ₹221 crore, and distribution profit soared 478% to ₹218 crore.

The company operationalised 609 circuit kilometre (ckm) in Q4 FY23. Energy demand (units sold) improved by 11.5% in Q4 FY23, driven by a rise in commercial segment and industrial segment demand.

Adani Transmission MSCI

Adani Transmission shares drop 3% after Q4 results