Release Date: May 03, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Adani Green Energy Ltd (BOM:541450, Financial) achieved a 33% increase in revenue from power supply, reaching INR 7,735 crores.
- The company reported a 30% increase in EBITDA, amounting to INR 7,222 crores, with an industry-leading EBITDA margin of 92%.
- Adani Green Energy Ltd (BOM:541450) added 2,848 megawatts of greenfield capacity in FY '24, marking a 35% year-on-year increase.
- The company has strengthened ties with strategic partners and investors, including TotalEnergies, GQG Partners, and Qatar Investment Authority.
- Adani Green Energy Ltd (BOM:541450) is developing the world's largest single-location renewable energy plant of 30,000 megawatts in Khavda, set to be completed by 2029.
Negative Points
- The company's net debt to run rate EBITDA is at 4x, although improved from 5.4x a year ago, it still indicates significant leverage.
- Adani Green Energy Ltd (BOM:541450) faces challenges in securing land and transmission connectivity for its ambitious capacity expansion plans.
- The company has not participated in recent SECI bids, potentially missing out on lucrative opportunities.
- There are concerns about the availability of equipment, such as panels and transformers, which could impact project timelines.
- The reliance on merchant power sales, which currently constitute about 5% of the portfolio, exposes the company to market price volatility.
Q & A Highlights
Q: How should we think about capacity addition beyond 20 gigawatts? Are you participating in any bids?
A: We have 20 gigawatts of locked-in PPAs and are pursuing C&I customers and Adani Group companies for their decarbonization needs. We will update the market as relevant contracts are signed. We aim to lock in higher-margin contracts and participate in value-added tenders selectively.
Q: Will you participate in upcoming SECI bids for hybrid or storage projects?
A: We may participate in specific bids on an opportunistic basis. We plan to add 6,000 to 8,000 megawatts of new capacity annually and will allocate this capacity based on PPAs, C&I customers, and Adani Group companies' needs.
Q: What is the guidance for commissioning new capacity in FY '25 and FY '26?
A: We plan to add at least 6,000 megawatts of greenfield capacity in FY '25 and a similar or slightly higher number in FY '26. Our target is to execute 6,000 to 8,000 megawatts annually.
Q: Do you foresee any challenges with equipment availability or grid evacuation?
A: We do not foresee any challenges with equipment availability or grid evacuation. We factor in supply chain, evacuation, capital availability, and organizational capability when setting our capacity addition targets.
Q: Why did you not participate in some of the recent tenders with good returns?
A: We are focused on building a strategic renewable energy portfolio to meet India's growing energy demand. We aim to provide unique solutions and higher margins by not competing in every tender but selectively participating in those that align with our strategic goals.
Q: What is the timeline for commissioning pumped storage projects?
A: The first 500-megawatt pumped storage project will be commissioned in FY '27. Future projects will have a timeline of 2 to 3.5 years from the start of construction.
Q: What are the capital costs for solar and wind projects?
A: The capital cost for solar projects is around INR 5 crores per megawatt, and for wind projects, it is approximately INR 6.5 crores per megawatt.
Q: Will Adani Green use its renewable capacity for green hydrogen projects?
A: Currently, Adani Green is focused on delivering 50 gigawatts by 2030 for government counterparties, C&I customers, and Adani Group companies' decarbonization needs. We do not have plans to allocate significant capacity for green hydrogen.
Q: What is the merchant power sale revenue for Q4?
A: Approximately 5% of our portfolio is merchant capacity. We can provide exact numbers later, but it is around 6.5% to 7% of our total capacity.
Q: Do you have sufficient land and transmission connectivity for your pipeline?
A: Yes, we have sufficient land and transmission connectivity for 100% of our pipeline.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
