Fitch Ratings has revised its outlook for Adani Energy Solutions Limited (AESL) and its subsidiary, Adani Electricity Mumbai Limited (AEML), signaling a positive shift in the credit profile of these Adani Group entities.

Key Rating Actions

Implications of the Rating Action

The revision of the outlook to 'Stable' from 'Negative' while maintaining the 'BBB-' rating suggests that Fitch Ratings has a more positive view on the financial stability and credit worthiness of both AESL and AEML. This change in outlook may indicate:

1. Improved financial performance or stability
2. Enhanced liquidity position
3. Better risk management practices
4. Positive industry or regulatory developments

About the Rated Entities

Adani Energy Solutions Limited, formerly known as Adani Transmission Limited, is a key player in the power transmission sector in India. Its subsidiary, Adani Electricity Mumbai Limited, is responsible for power distribution in Mumbai.

Disclosure and Transparency

In line with regulatory requirements, AESL has promptly disclosed this rating action to the stock exchanges. As per the company's filing:

"Fitch Ratings has revised the outlook of the Adani Energy Solutions Limited ("AESL"), to "BBB-/Stable" from "BBB-/Negative" and affirmed its Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at 'BBB-'."

This timely disclosure demonstrates AESL's commitment to transparency and compliance with SEBI Listing Obligations and Disclosure Requirements Regulations, 2015.

While this rating action presents a positive development for AESL and AEML, investors and stakeholders should continue to monitor the companies' financial performance and market conditions for a comprehensive understanding of their investment potential.

Adani Energy Solutions Limited (AESL) has reported a robust financial performance for the first half, with significant growth in revenue and profitability. The company also outlined ambitious expansion plans across its business segments.

Financial Highlights

AESL reported a total income of INR 13,793 crores for the first half, marking a 16% growth over the previous year. The company's consolidated EBITDA increased by 13% to INR 4,144 crores, while consolidated Profit Before Tax (PBT) grew by 34% to INR 1,404 crores.

Operational Achievements

The company successfully commissioned three transmission projects during the first half:

1. Khavda Phase-II Part-A
2. Khavda Pooling Station
3. Sangod transmission line

AESL's Mumbai utility, Adani Electricity Mumbai Limited (AEML), continued to demonstrate operational excellence with distribution losses at 4.30% for the first half.

Smart Meter Business

The smart meter segment showed significant progress:

• Total installations reached 73 lakh meters
• 42.5 lakh meters installed in the first half
• Smart meter order book of 2.46 crore meters
• Revenue potential of INR 29,000 crores from the order book

Future Plans and Capex

AESL has outlined an ambitious capex plan:

The company expects this capex to contribute approximately INR 2,800 crores to EBITDA on an annual run-rate basis.

Transmission Business Outlook

• Current order pipeline of INR 60,000 crores
• Plans to commission at least three transmission projects worth over INR 12,000 crores in the second half

Deleveraging Efforts

As part of its deleveraging strategy, AESL bought back $44 million of USD bonds during the quarter.

Management Commentary

Kandarp Patel, CEO of AESL, stated, "We currently have about INR 60,000 crores of order pipeline for transmission projects. Similarly, we have a total revenue upwards of INR 27,000 crores and INR 14,000 crores of capex in smart metering business."

He added, "We will capitalize about INR 17,000 to INR 18,000 crores of capex, which will contribute about INR 2,800 crores of EBITDA on an annual run-rate basis."

Adani Energy Solutions Limited continues to demonstrate strong growth across its business segments, with a clear focus on expanding its transmission, distribution, and smart metering capabilities. The company's substantial capex plans and robust order pipeline indicate a positive outlook for future growth and profitability.