Adani Green Q1 profit rises about 20% as clean energy capacity crosses 20 GW

Mumbai: Adani Green Energy Ltd’s profit for the June quarter rose by almost a fifth as its operational clean energy capacity crossed the 20 gigawatt (GW) mark, even as it continues to face constraints due to inadequate power evacuation capacity in the country.

Adani Group’s renewable energy arm has signed an agreement with the group’s energy distribution arm Adani Energy Solutions Ltd (AESL) to supply 4 GW of power in a bid to reduce uncertainty in its earnings. The capacity was previously going to the commercial market. This means that the electricity the company sells on electricity exchanges will now be sold to AESL at a fixed price, eliminating volatility.

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Adani Green’s profit attributable to shareholders remained in February: ₹845 crore in the quarter ended June ₹713 crore in the corresponding quarter last year.

Revenue from electricity sales increased by approximately 30% annually ₹4,280 crore. Earnings before interest, tax, depreciation and amortization (EBIT) from energy supply increased by a third to Rs 4,122 crore.

Curtailment, or deliberate curtailment of power generation due to shortages in grid capacity, has reduced the company’s Ebitda by 5-7%, Ashish Khanna, the company’s CEO, said in his post-earnings analyst call on Wednesday. However, it provided guidance for improving performance as new grid capacities come online.

“Slowly, as more transmission lines come along, we anticipate that these outage trends will disappear. And our expectation by the end of this calendar year is that there will be no outages, at least from Khavda, on all the capacity we have installed,” he said.

Also Read | Adani Energy Q1 results: Net profit up 124% to ₹1,149 billion

Shares of Adani Green fell 4.5 percent ₹1,472 on NSE on Wednesday.

Capacity expansion

During the quarter, the company reclassified approximately 4 GW of commercial power projects into the C&I (commercial and industrial) segment under a contract with AESL. Going forward, the company stated that it will shift all capacity initially allocated for the commercial segment to firm contracts with AESL.

“So all these things that are supposedly for business purposes for us, we have tied and will tie with AESL to get rid of the risk,” Khanna said.

According to Harshraj Aggarwal, vice-head of institutional equity research at Yes Securities, “Projects initially planned under the trader model will now be developed and monetized as C&I projects through this partnership, providing greater revenue visibility and reducing exposure to trading power price fluctuations.” “The projects are structured to deliver stable long-term returns, with contract periods of up to 25 years for solar and wind and 15 years for BESS, depending on individual project characteristics.”

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Adani Green’s operating capacity is 20.1 GW as of June 30, making it the first renewable energy company in India to cross the 20 gigawatt milestone. Of this, 9.5 gigawatts were in Khavda, where the company is building the world’s largest renewable energy field with a capacity of 30 gigawatts by 2029.

Adani Green has set a target of reaching 50 gigawatts of capacity by 2030.

The company also had a battery energy storage system (BESS) capacity of 3.5 gigawatt hours, the largest in India, as of June 30. Its goal is to exceed 10 gigawatt-hours by the end of this fiscal year. For context, 10 gigawatt-hour BESS systems can handle Mumbai’s peak demand (4.6 gigawatts) for more than two hours.