Ladies and gentlemen, good day and welcome to Q3 and 9M FY 2026 earnings conference call of Adani Energy Solutions Limited. From the AESL side, we have the following on the call as main speakers: Mr. Kandarp Patel, CEO AESL; Mr. Kunjal Mehta, CFO AESL; Mr. Kapil Sharma, Business Head Transmission; Mr. Pushpender Zala, Business Head Smart Metering; Mr. Bhaskar Sarkar, Business Head Cooling Solutions; Mr. Vijil Jain, Head IR AESL. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vijil Jain from AESL. Thank you, and over to you, Mr. Jain.
Sure, thanks, Renju. Just to add, we also have Mr. Kapil Sharma, the Business Head for Transmission Business, also with us. So thank you for, I mean, thank you everyone for attending the call. Good day and warm welcome to the quarter three earnings call. So I just hope you got a chance to go through the earnings material which we uploaded on the website and the exchange. And just to very quickly explain the flow of the call, so we will start with an opening statement from the CEO, followed by Q&A, and then a closing remark from the CFO. Let me now hand over the call to KP sir for opening remarks. Thank you.
Thank you, all investors and analyst friends, for joining this call. These are very exciting times for AESL. We have now delivered another strong performance in the last quarter. The adjusted PAT growth, if we take into account the one-time impact of before tax of INR 185 crore last year in quarter three, the adjusted PAT growth is 30%. Not only in financial terms, but in other CapEx performance as well as OpEx performance, the company has done significantly well.
In the first nine months, we have commissioned three transmission projects: NKTL, Khavda Phase II Part A, and Khavda Pooling Station, and Sangod Transmission Project. In the coming months, we are on track to commission another three projects. One of them is the landmark HVDC project, where almost the entire project work is completed. The testing and commissioning is going on.
The other projects that will get commissioned soon are Khavda Phase III A, which is Halvad Project, and WRSR Project. Besides the commissioning of a good number of projects in the coming time, we have also won another HVDC project, which is KPS III, Khavda South Olpad Project. Now, with this another HVDC project, our project pipeline has reached to about 78,000 crore. On the smart metering side, we have been doing in line with what we anticipated and projected. So in the current quarter, we have installed meters close to 19 lakhs, and now we have reached to about aggregate meter install count of about 92 lakhs. And by the time we close this year, we will certainly cross one crore meter installation.
On capital management side as well, you must have noted that Moody's has revised the rating and improved from negative to stable for two of our subsidiaries: Adani Transmission Step-One Limited and Adani Electricity Mumbai. As far as operational performance is concerned, we continue to have excellent availability, which is over 99.7%, and which has resulted in an incentive income of INR 33 crore as well. As far as distribution is concerned, because of weather in this year, the sale has not grown as compared to the last year. But on the operational front, we continue to do excellent work. Now, T&D losses are around 4%. To be precise, it is 4.03%, which is a significant achievement looking to the fact that we continue to improve this particular parameter. As far as consumer services and other things are going, we have been doing fairly well there.
In fact, the collection has remained close to more than, in fact, 100% collection efficiency, and we have been now collecting more than 85% of payment through e-payments. We already talked about smart meter, where we have already installed 90 lakh meter and reached to close to 93 lakh installation. The pipeline also remains strong, so about 100 million meter are yet to be bid out. We expect to continue to maintain our market share, and we will add that pipeline in the metering business as well. As far as C&I business, there are a lot of activity going on, and in fact, we feel that this is going to be one of the major growth drivers besides transmission and smart metering. We have now reached to aggregate load of about 700 MW, serving about 14 consumers. That was at the end of December.
The current count is 31 consumers and a load of about 1,300 MW, so we are rapidly growing there, and you will see a lot of action on C&I front. As far as cooling business is concerned, we continue to create that market for cooling business. You are aware that we are already putting up India's largest district cooling facility of 40,000 metric tons of refrigeration at Mundra. As far as financial is concerned, you must have noted those numbers. The income has grown by 16%, and consolidated EBITDA has also now reached to INR 2,200 crore quarterly, which is a growth of 21%. The consolidated PAT has also rose by 43%, which has reached to INR 800 crore level. Now, what is the most important thing that is going to happen?
That, as far as transmission and smart metering and C&I business is concerned, there is a strong pipeline and opportunity pool available in the market. So we will continue to add that. But at the same time, the kind of effort that we are putting in execution, you have seen that result in smart metering side. In next year, we expect to add massive capitalization in transmission as well. And with those, in fact, we are poised to add about seven projects in the next financial year, capitalize seven projects, which will the gross block of those projects will be close to about INR 24,000 crore-INR 25,000 crore. And that will give a massive jump to the EBITDA and profitability of the company. So I think this is a very exciting time for AESL, and we look forward to hearing from all of you from time to time. Kunjal, over to you.
So with these remarks, I now request any questions that anyone would have. I'm happy to take questions from the investors.
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Mohit Kumar with ICICI Securities. Please go ahead.
Good morning, sir, and thanks for the opportunity. So my questions are more on the industry side. Of course, we haven't seen too much of a traction in the smart metering order book, right? I think whatever we have won was from last year. Do you think in the next 12 to 18 months, do you think that there will be some more opportunity for the smart metering from the smart metering side?
Mohit, thank you so much. As always, you are the opening best man. As far as smart metering bidding is concerned, there are a few states where bidding is yet to happen or yet to conclude. One is Tamil Nadu, that bidding happened, but I think they will re-invite the bid. But there are a few other states like Karnataka, Telangana. They initially have not got that DPR approved under RDSS. I believe those states have now filed that DPR with MOP, and on the receipt of that approval, they will also come out with bidding. So we expect that significant action we will see in smart metering bidding in the next couple of quarters.
Understood. On the transmissions, of course, we have done phenomenally well in this scope. I think we added, I think, INR 40,000 crore-INR 50,000 crore worth of new transmission projects. My question is more about the future. How do you think about the next 12-18 months? It seems like the transmission bids have slowed down. Do you think, in your opinion, that we can do at least INR 60,000 crore-INR 70,000 crore additional bidding in the next 12 months?
So Mohit, the project that has been approved by NCT and those various state STUs, if you add all those projects, it crosses 1 lakh crore bidding opportunity. Conservatively, we think that bidding for at least INR 70,000 crore-INR 80,000 crore will happen in the next 12 months.
The last question on my side is, why this HVDC line is we are thinking about we were told earlier that it will get commissioned in the Q2. It hasn't happened, and what is the new tentative commissioning date?
So all the work is completed there. Testing and commissioning is going on. So we expect that to get commissioned in another 30-45 days.
Anything which caused the delay, sir? Anything?
The delay was so there were two major HDDs that we had to do on that Vasai Creek, and there were some work permission-related issues because of which it got delayed. There is also 4 km of stretch of cabling that is to be done in Aarey Colony. There we took a little more time because that rain got prolonged, and we have to make very, very focused effort there that while we do that underground cabling work, we don't damage any ecosystem. Because of that prolonged rain in Mumbai, it got a little late.
Understood.
So both the terminals are ready. Now the terminal testing and commissioning are going on, and the last batch of cabling is also getting ready.
Understood, sir. Thank you. All the best, sir. Thank you.
Thank you. Next question comes from the line of Puneet Gulati with HSBC. Please go ahead.
Thank you so much. My first question is on your KPS III HVDC. What are the costs that you are now penciling for this Khavda Olpad project?
Project cost?
Yeah.
That will be about close to INR 19,000 crore.
INR 19,000 crore. And on the Bhadla Fatehpur HVDC, sir, what is the stage of execution there?
All the contracts have been awarded. Entire route survey has been done. The necessary application for forest and wildlife has also been submitted. In fact, this forest clearance for Rajasthan portion has in fact progressed significantly, and PSC I committee has already given approval. Construction at Bhadla site has already begun. Most of the basic engineering has been done, and now we will see a lot of progress in terms of execution on the ground. All the preparatory work has been completed. We are finding some challenges in land acquisition for Fatehpur, but we expect to complete that also in one month's time. Significant work has been done there. More than 200 acres has already been acquired.
It's still due by July 29th, right? So land acquisition challenges can still be surpassed. And can you still do it by July 29th, or do you think it could be delayed?
Because the entire engineering and other things have been done, the contract is also in place. We will now very soon mobilize the resources and will start construction there.
You have four projects due for completion this calendar year, right? Khavda IV, Jamnagar, Navinal, and Pune III. Are these all four on track?
Yeah. So Navinal got a little delayed because the issuance of transmission license from CERC got delayed, where we already commenced the work, and the foundation for half of the line has been done. But in absence of that license, we were not getting 164 approval. Now we will get that. But given the progress, even though it is late from original schedule, we expect it to complete it in the current year. As far as Jamnagar project is concerned, there we are acquiring the substantial land, which is government land, so that process is going on. And we already started working on the transmission line.
Those ROW order under government policy is under process, and we expect those orders to come out in one month to one and a half months for the entire region. And with those orders, we will start the execution work as well. But Jamnagar project has also, as of now, is delayed by one to one and a half months as compared to the original schedule. But we'll catch up once we have these government approvals.
Okay. C an you give me the revised timeline for all these four, if you can?
Yeah. So HVDC, you are talking of Jamnagar and Navinal?
Yeah. The four due this year, right? So Khavda IV is also due I guess, right?
Yeah, yeah. Jamnagar and Navinal both will get complete in the last quarter of this year.
Okay.
Khavda IV A will be. One element will be in the second quarter. Another element will be in the third quarter.
Okay. And t he Pune III, that's also due for this year, right?
Yeah. Pune III also will be in the last quarter.
Last quarter of this calendar year?
Next calendar year.
So, okay, 2027.
Next year. Next financial year, not calendar year.
Oh, next financial year. Okay. So more like February, March. Okay. That's helpful. Thank you so much. And lastly, I've been noticing your smart meter execution has picked up. Anything that has changed from policy support side or anything that you are doing to pick up pace there?
So we have been making all those efforts in picking up that execution rate. So we are installing about 25,000 m a day. We keep on getting those challenges on the ground, but now having installed so much of meter and with this kind of exposure, our team has been able to do fabulous work on the ground.
Okay. That's very helpful. Thank you so much and all the best.
Thank you.
Thank you. Next question comes from the line of CEA Garrit with Sirin Alpha. Please go ahead. Mr. Garrit, please go ahead with the question. Mr. Garrit, please unmute yourself and go ahead with the question. Since there is no reply from the line of Mr. Garrit, we'll move to the next participant, and that is Mr. Gaurav Nigam with Tunga Investments. Please go ahead.
Yeah. Hi, sir. Thank you for taking my question. I have a first question. We are hearing about this policy relaxation on the Chinese side in some sectors. I think most recently, there has been some news about the thermal power side. I just wanted to check if there is anything that we can benefit from, and is there any positive benefit on the transmission side specifically that can come to us on going forward basis?
So Gaurav, if that happens, obviously it will help because that will increase our options for equipment sourcing. But even if it is not done, we are not affected because we have that kind of strategic relationship with all major OEMs. We have been doing all these projects so far with the restriction on Chinese players, and we will be getting all the supplies at the right time and at appropriate pricing. So obviously, it will be an incremental advantage, but even if it doesn't happen, we are not affected.
But as of now, is there anything where we are positively getting the benefit, or nothing has happened so far?
Come again? Sorry.
I was just asking, is there any benefit that we have started getting as of now, or that restriction still stays, sir?
No, it is still there. So there were news items which we came across that government is planning to relax it. We don't know the exact contour of it, but if that happens, then obviously it will increase options for us.
Understood, sir. And sir, the second question was specifically about if you look at all the transmission side, I mean, we are seeing lower tendering. I mean, first half was slow. We expected third quarter to pick up. I think there is some pickup. And on the execution side also, I mean, as you mentioned, there have been some delays. I think we are hearing in the other developer also, there are some delays. So I mean, is there something structurally which is happening both on the tendering side and the execution side? I mean, how do you think about it? Because I mean, year- on- year, if you look at from last year to this year, there have been both sides, there have been significant lowering. So I mean, just wondering, how do you look at both on the tendering and execution side?
Gaurav, the challenges in execution are known to all of us. Essentially, those are relating to equipment supply or manpower ability or ROW. But this year, the additional challenge that we faced, especially us, because our mainly concentration of project execution is in Mundra, around Khavda and Gujarat, and also in Maharashtra, where rain continued for quite some time. It was abnormal.
It continued up to almost Diwali period, and that has affected our execution. As far as manpower ability is concerned, what we have done is that now the stringing manpower was the most critical one. In fact, in the last six months, we have set up our own training facility at Godhra, where it's a catchment area for people who work on Tower Erection, and that facility is up and running. Now we will be having 200 people trained available to us from this month.
Every quarter, we will have about 400-500 people available to us in the stringing, which we will provide to our EPC partner for execution, and with this kind of endeavor, we expect that a lot of significant progress will happen on the execution side. The other challenge which remains is ROW, and therefore I mentioned that in Jamnagar and in most of the projects, what we are trying to do is while we start the project, but we focus more on getting those ROW orders from collector, compensation-related order from collector. So that becomes a benchmark for us for negotiation with the farmers. So with all this effort, we expect to see a lot of progress in this quarter as far as CapEx is concerned and next quarter because that also will be a working season. So you'll see a lot of action on that front.
Good. And sir, just your perspective on the tendering side as well. I mean, there seems to be, I mean, year-o n -year, there is a drop. So how do you think about that, sir?
So as I said earlier, we expect that about INR 80,000 crore of bidding will happen combined together, state as well as center. And that INR 80,000 crore is also a significant number. And if we even continue to maintain our market share, we will have a significant opportunity there.
Got it, sir. Got it, sir. Thank you. Thank you, sir.
Thank you.
Thank you. Next question comes from the line of Sumit Kishore with Axis Capital. Please go ahead.
Thanks for the opportunity. My first question is to better understand the phase-out of capitalization of your works in hand. So of the INR 780 billion, the works in hand, would it be right to say that roughly INR 400 billion is non-HVDC? And how is the capitalization spread over FY 2026, 2027, and 2028 for this? And you can correct the numbers.
Yeah, sure. So based on the timeline which we just mentioned, the Mumbai HVDC and the NKTL project, which will get complete, I mean, the NKTL which just got completed, around INR 10,000 crore of capitalization, I mean, will get completed in the next two months itself, which will give an additional tariff of around INR 1,600 crore. We expect the additional ones, especially the Khavda Phase III, that is the Halvad project and the WRSR projects, that will get commissioned in the next three to five months period, which will lead to an additional capitalization of close to INR 4,800 crore.
And then all the three projects which Kandarp mentioned will lead to an additional capitalization of INR 10,000 crore by the end of the next financial year. All put together, we have INR 10,000 crore in the next one or two months, INR 5,000 crore odd in the next four to five months, and the balance INR 10,000 crore coming up by the end of next financial year.
FY 2027 end.
Correct.
So, what is the visibility right now for FY 2028 as well from the non-HVDC side?
I don't have the immediate visibility of FY 2028. That would be too far away. Is this something which we have immediately on hand?
Sure, sir. My second question is in relation to the two large HVDC projects that you are executing. Broadly, what would be the CapEx phase-out as you complete these projects by 2029, 2030 or so? Broad CapEx phase-out.
Yeah, so roughly, the CapEx in transmission per year on an average, there could be a variation year- to- year, but for next five years, it would be in the range of about INR 18,000 crore-INR 20,000 crore.
Including everything, your HVDC, non-HVDC everything?
Correct.
Specifically for HVDC?
In the later years, it might go up as we add new transmission projects in our KT. But given the project pipeline currently, it will be about INR 18,000 crore-INR 20,000 crore .
Okay. And specifically for your HVDC projects, would it be fair to say that in the first two years of execution, less than 25% of the CapEx will get incurred and bulk of it will be in the latter part?
Yes.
Okay. And my last question, if you can also shed some light on the phase-out of the next HVDC project awards, which is likely, say, till end of FY 2027, to retain the projects and the potential size that you're looking at?
New projects, new HVDC projects likely to come up in FY 2027? So there are a few HVDC projects under the bidding pipeline, and we certainly would be participating in those bids sincerely.
Any specific bids that you're aware of that you can share with us?
Yeah, there is one project, HVDC project from Barmer, HVDC, which comes up to Maharashtra, South Kannada. That is the immediate.
Kannada.
Yeah, that we expect to come in the bidding process.
So can that get awarded by June, or will it be maybe the second half of CY 2026?
I think that it will be done in the first quarter of the next year.
Okay. That is great. Thank you so much.
Thank you. Next question comes from the line of Manish Somaiya with Cantor. Please go ahead.
Hi, this is Shweta here from Cantor on behalf of Manish . Congrats again on another strong quarter. I have two questions from me. The first one is on the debt stack. We've had multiple bond buybacks in the year earlier, and sort of wanted to understand, given the surplus cash for this year, what is the prioritized use? Is it going to be further bond buybacks, or is it going to be more CapEx? And also, given the scale of transmission and the smart metering ramp-up, what leverage ceiling should we sort of look at that would essentially force a reconsideration on equity? Because you've discussed this before, that you've said there's going to be no fund-raising trends by equity. So I think this is my first question, and then we'll get into the other one.
Yeah, hi. So you're right, so the company did buy bond buybacks, and we did bond buybacks in our electricity Mumbai distribution company. We did a bond buyback of INR 120 million last year, followed by a bond buyback of INR 95 million up to the nine months that we did. We did a bond buyback of INR 50 million, and then we again followed it up with a buyback of INR 45 million. So AEML distribution business, because of the surplus that it is generating, and as we have guided, we will continue to delever the company after meeting all its CapEx and its OpEx requirements. So that company has roughly a CapEx of around INR 1,500-INR 1,600-odd crores. And after meeting that CapEx, the company still has their surplus, which we will use to delever the balance sheet.
At the right time, we will continue to do the bond buybacks in that organization. As far as the consolidated debt profile of the company concerned, we have always guided that we would be in the range of around 4x-4.5x based on our CapEx cycles. It would be in that guided range always.
Understood. Also, given the progress in the newer verticals, can you reshare the margin structure, especially for the C&I business, sort of the expected growth and the capital intensity to scale the vertical, and what are the timelines that you're targeting for this business?
So C&I, especially C&I and district cooling business, like you see in a smart meter, which is the margin as compared to the conventional transmission and distribution business, there are very high margins in smart metering. We expect similar kind of margin structures both in district cooling as well as C&I business. In fact, C&I business would be a very interesting one where we won't have any CapEx to do, but despite the fact that because of our solutioning capability, the margins would be significantly high, of the order of 75 + paisa per unit. And that will be a massive segment where we are also very excited.
Thank you. Thank you for sharing that. I have to ask this question, especially on data centers. You've mentioned there's a lot of potential for AESL, especially with the group's tie-ups. And sort of what indicators should we be tracking for AESL?
What indicators? Well, data centers, in fact, we bring a great amount of value when we deal with a data center because the two things where they find it difficult, not only in India but across the globe, is getting the power infra or connectivity and also power supply. Now, AESL having presence in both, we are in a position to offer them an end-to-end solution. And this kind of approach has been well appreciated. In fact, we have been in discussion with multiple players, big players who are planning to enter into India in a massive way. So it's going to be a very exciting one, especially C&I, coupled with our capability of delivering that power infra as well.
Thank you. Thank you, and congrats again on a great quarter.
Thank you.
Thank you. Next question comes from the line of Pratik Chitalia with M&G. Please go ahead.
Thanks for the opportunity, sir, so my question is around how are we going to fund the future CapEx? Are we going to raise the debt, or it will be funded through internal accruals? How it will be done?
Sure, so I'll split that. This is the business divisions that we have, so in AEML, as I just told, that business, whatever CapEx that is there, is being funded through its internal accruals, so is the case with respect to the smart meter business. Smart meter business has a low gestation period, and because of that, it is able to fund its own CapEx. In fact, what we are actually doing is securitizing the receivables of smart meters based on the meters that we have installed. We are securitizing those meters, and that is funding more internal accruals for my transmission projects, and in case of transmission business, we generally lever these assets up to 70%-75% at the inception, and then once the asset gets completed, we again launch it into the bond markets.
So we try to leverage it further up to 80%-85% once the asset gets operational. So based on that and based on the internal approvals and the fund flows that the company is generating, we do not envisage any further equity borrowing, which is required to fund all our under-construction projects that we currently have.
Okay. Are we looking at the bond funds funding through bonds, or?
So, for our debt funding, once the asset gets operational, we continue to look at various options, which includes domestic bonds, which includes bonds in the international markets, as well as bonds in the capital markets across. So yes, we look at, but only after the asset gets completed.
Also sometime for refinance.
Of course, refinancing, yes.
Okay. Okay. Thank you, sir.
Thank you. Next question comes from the line of Vishal Periwal, PL Capital. Please go ahead.
Yes, sir. Thanks for the opportunity. Sir, in terms of tendering this particular year, can you give some color how it has been in the last three odd quarters of FY 2026? And in terms of NCT cost, I mean, out of that, how much we could have won this year?
So this year, so far, we had up to INR 60,000 crore worth of tendering, which happened. And this is again based on the NCT cost estimate. And as you know, the actual cost estimates project to project differ. For example, HVDC especially, right? So the numbers are elevated in terms of actual cost. But so far, I think what we are seeing is close to INR 80,000 crore worth of bidding should conclude by end of this year, again, which is a large number.
Thanks. And out of the INR 60,000 crore you mentioned, so we could have won how much? I think.
Yeah, so we've got two projects. One is the HVDC, which is, as per NCT, about INR 12,000 crore. And one more project, which is the Talegaon, which is about INR 1,600 crore. So INR 13,600 crore in terms of NCT cost, which broadly gives us a market share of about 18%-20%.
Okay. And the escalation which you mentioned, so I think the NCT is 12,000 for HVDC, which you have recently won. So in this call only, you mentioned probably the cost could be in the range of INR 18,000 crore-INR 20,000 crore . So the escalation that you mentioned, it is pertaining to that only, right?
Correct. Correct. Correct.
Okay. Got it. And then second is, in terms of tendering, you did mention INR 1 lakh crore, probably opportunity of INR 80,000. So all these are ISTS projects? Any opportunity are you seeing in the state also?
No, no. There are state projects as well, especially from states like Maharashtra, Karnataka, and Rajasthan.
Okay. And then when you mentioned we'll see these opportunities in a couple of months, so probably things will move to financial year 2027 also, INR 80,000 crore that you mentioned, right, sir? Or within this next two months, we are seeing.
Next 12 to 15 months, you will see almost INR 80,000 core to INR 1 lakh crore of bidding.
Okay. And then maybe hopping on the same which you might have answered. So the tendering this particular year was slow. So I know, I mean, we have maintained market share. I mean, that is what is required from AESL. But at a sector level, sir, what could have been the reason for the same? Or maybe last year there were a lot of one-offs and bump-up year? How you see things on the ground?
I think every year, on a steady-state basis, we will have about 80,000-90,000 . Suddenly, one year, because there was a backlog and they wanted to finish it off quickly, it bumped up. This year, it got a little slowed down because there were certain transmission projects that they wanted to reevaluate depending on the change in the generation and demand profile in the country. But on a steady-state basis, we believe that it will be about 80,000-90,000 bidding that will happen every year. Because now the state sector has also started opening up. So as I mentioned, three states are already very, very active in TBCV. And we expect many other states like UP, Bihar, Assam, Tamil Nadu, Gujarat. Those are also expected to come in TBCV.
Okay. And as of now, in this INR 80,000 crore, which states are active? We are looking for.
Rajasthan, Karnataka, and Maharashtra.
Okay. Okay. Sure. So.
In Maharashtra, in last six months, at least seven-eight projects got under bidding.
Okay. But I mean, has there been any even outcome or tendering?
Yeah, yeah, yeah. They have been awarded. They have been awarded.
Okay. Sure, sir. That's all from my side. Thank you.
Thank you. Next question comes from the line of Chunyi with Ice Spring . Please go ahead.
Hi. Thanks for the opportunity. I have two questions. Firstly, regarding the refinancing of your solar bonds, would the company consider more of an onshore as an option or offshore? And what are the considerations that the company would look at? Looking at this from more of a currency perspective, and also there's a headline today on Adani as well. So probably from the corporate governance side, it could be some negative sentiment. How would the company approach this? Thank you.
No, sure. So what we generally focus is that we keep our options open, whether it is offshore or onshore. And at the right time, we look to refinance our bonds. So the options are always open, whether it is offshore or onshore. Our focus is always to ensure that our bonds are always rated investment grade, whether it is offshore and onshore. And therefore, you would see in the onshore markets, most of our projects have AA + and AAA ratings. And similarly, in the offshore markets, our bonds have sovereign ratings. So our focus is to ensure that we get the highest ratings. And based on that and based on the market conditions, we would tap either the onshore market or offshore market for our refinancing of the existing bonds that we have.
So, for the US dollar bonds coming due this year, when will the company be considered come out of the plan for going offshore/onshore? Because I think it's in August.
Yeah, yeah. We are working towards that. And we would refinance that at least in the next two to three months and complete the refinancing.
Okay. Thank you. That's very helpful. And another question is probably on the ESG side. I would like to know how does the company assess the risk with our supply chain partners, especially labor practices and maybe environmental compliance? Thank you.
We are very much working with our vendors, especially the EPC vendors. We ensure that they follow all the governance, especially the safety practices that we follow, and also comply with our own ESG standards that the Adani Group, as well as the AESL as a company, is following. From our vendor ecosystem, we ensure that all our vendors are also in compliance with the ESG standards that we have set for us as well as for the Adani Group. Just to add to the vendor ecosystem part, typically, across the value chain, our focus is to tie up with tier one, tier two suppliers. To ensure that we have last mile or the traceability element is there in terms of the best governance as well as labor practices at the respective vendors also.
All effort you must have seen that is translating into our continuous ESG rating, whether it is international or domestic one.
Lucy, are you done with the questions?
Yeah. Thank you. Thank you. That's very helpful.
Thank you. Next question comes from the line of Vishal Pai with Bandhan Mutual Fund . Please go ahead.
Hi. Thanks. Could you talk a bit more on leverage as to what we currently and what should be the leverage in the next couple of years? By month of 2027, where should the total debt be? And what portion of this is financed by US domiciled banks?
Sure. So our total net debt currently, as we speak, is INR 38,000 odd crores, of which INR 48,000 is gross debt. And we have cash balance of INR 9,600 odd crores. Out of the INR 47,000 of gross debt we have, we have roughly INR 9,700 of the USD bonds in Adani Electricity Mumbai and INR 10,500 odd crores of bonds in the transmission business. So around INR 25,000 odd crores of dollar bonds in INR 47,000 of the debt that we just mentioned. And our leverage currently is 4.3, which was 4.4 in September based on the published results. Currently, we are at 4.3 based on the trailing 12 months. And we will continue to maintain that always.
Mr. Parai, are you done with the questions?
No.
Just go ahead.
Let's go to you. You bought back some bonds, right? So.
Correct. Correct.
FY 2020, what has been the total purchase of bonds that you have done?
In this financial year, we did a bond buyback of $95 million. $50 million we did in Q1 and $45 million we did in Q2.
Okay. Where would this leverage what would be the total debt by month of 2027?
So it would be in this range itself. The net debt would be in the range of INR 38,000 crore-INR 40,000 odd crores. Because we have the natural amortization of the repayment, which is also happening parallelly.
Yeah. Okay. So by month 2027, with this, say, INR 30,000 crores of incremental CapEx that you will do INR 25,000 cores, INR 30,000 crores, your net debt you are saying will still remain at INR 40,000 crores. Is that what you are saying?
So it is the capitalization which will happen. The CapEx has been done on a progressive basis every year. So yeah. So what I spoke was the capitalization part.
Agreed. But even if so, if I assume, say, INR 20,000 crores worth of CapEx that you will do for the next financial year, say, and INR 5,000 crores of CapEx that you might do in fourth quarter, so things that is where, even if I assume INR 25,000 crores more of CapEx that you would.
Yeah, yeah. But that would also translate to additional earnings because of the capitalization which will happen, right?
Sure. Sorry to hop on this. But so by month of 2027, you are saying your net debt will still be flattish?
Correct. Correct.
Okay.
I can walk you through the numbers. I mean, but it's not going.
Take that offline.
Yeah.
Okay. Sorry. Last question is, of this INR 25,000 crores of bonds, what is the maturity that is coming about in the next two years?
So the immediate one which is coming up is the $500 million bond, which is in August 2027, which I told you we are going to refinance in the next one to two months itself. The balance have all dated maturities. Like the AEML bonds is maturing in 2030, 2031. Our average debt maturity profile of the dollar bonds as well as the INR bond market is currently 7.9 years.
So after the August 2027, the next maturity would come up in 2030 of these INR 25,000 crores of bonds?
The next is in 2029, and the two AEML bonds are in 2030 and 2031.
Okay. This is helpful. Thank you.
Thank you. Next question comes from the line of Shriram Kapoor with Jefferies. Please go ahead.
Hi, sir. Thanks for the opportunity. Just want to ask you on your CapEx and capitalization. So starting with CapEx, last quarter you had guided for transmission about INR 114 billion-115 billion, distribution INR 16 billion, and smart meters INR 40 billion for this year. Are you on track for that kind of CapEx this year? I mean, are you maintaining that guidance?
We did CapEx of INR 9,294 till nine months. By the end of this financial year, we would be in the range of around INR 15,000 odd crores once the entire CapEx has been completed for transmission, smart meter, and distribution.
So this is a slight downward revision from last time. Is there any particular segment where this revision has come? Is it from the transmission side or smart meter side? Would you be able to quantify that?
So some of the projects got spilled over by one or two months in the next financial year. So that's the reason why the INR 12,000-odd crores I mean, just about INR 1,000-odd crores, we had guided the market to around INR 16,000. We are currently looking at around INR 14,500 crores-INR 15,000-odd crores.
The downward is mainly in transmission.
Okay. Got that. Secondly, on capitalization, so I guess similarly, last quarter you had mentioned that in the second half, we're expecting about INR 120 billion of capitalization in the transmission segment. Now you mentioned it's about INR 100 billion. So there's been a slight downward revision there as well. That, again, I'm guessing is because of the deferment of projects. But just want to understand this breakup that you mentioned of INR 100 billion in AEML and the NKTL. So AEML, my understanding, it's a INR 70 billion project. And NKTL, as per your previous release, was a INR 965 crore project. So is that the right number? So what is adding up to the INR 100 billion that you expect?
You are right. 965 NKTL is the correct number.
Okay. So that means the balance that we're expecting in the fourth quarter of FY 2026 would be the Mumbai HVDC of INR 70 billion. And the NKTL has already happened as of December. Is that going to happen in 4Q?
It has already happened. Just happened in December. Yeah. Yeah.
Okay. Understood. And then so earlier in the call, you mentioned this INR 240-INR 250 billion total. That would be including 4Q as well as FY 2027, right, of seven projects to be commissioned?
Correct. Correct. Correct.
Got it. Understood. Thank you so much.
Thank you. Next question comes from the line of Anuj Upadhyay with Investec. Please go ahead.
Yeah. Hi, sir. Thanks for the opportunity. Just one thing on the smart metering, we had given a guidance or a target to reach around 6 crores over the coming few years. Currently, we have a pipeline with installation in the range of 2.5 years. Any target by when can we reach this 6 crore number?
So the 6 crore was we were talking about that number a couple of years back. Unfortunately, in the last entire financial year, there was no significant bidding opportunity came up. As I explained to you, there were many states who initially never wanted to become a part of RDSS. They didn't come out with a bidding. Now, most of them have submitted their proposal to Ministry of Power. And we expect that bidding to happen in next year. And we will, if not reach to 6 crore, but we will at least maintain our market share, meaning thereby we would have about 5 crore of meter concession.
Okay, and secondly, you mentioned.
But what's also important is that the CapEx or the capitalization got translated into the transmission project. Because at that point in time, our under-construction pipeline was just around INR 15,000-odd crore, which is now close to INR 80,000-odd. I mean, that was a bigger shift which happened when we were talking about 6 crore meters if we were referring to that period.
In fact, that is the biggest advantage that AESL has of diversity in businesses. Like many other similar players in transmission doesn't have that kind of diversity. So we could utilize opportunity in transmission to compensate that was not happening in smart metering.
Got it, sir. And sir, in one of the earlier answers which you responded to someone's query, you mentioned that the smart metering segment would be self-funded through the internal accruals. Now, with, say, a run rate of around 1 crore installation or slightly higher by the end of the current fiscal, and my sense is our annual revenue on a per meter basis comes in the range of INR 600-odd crores. So that should INR 1,600, sorry. So that should fetch you a cumulative revenue somewhere in the range of INR 600 crores on a per annum basis just on installation of 1 crore meter.
By going or reaching a number INR 2.5 crore, which probably we are targeting by the end of next fiscal, that number would probably go up somewhere in the range of close to INR 3.5 crore and INR 4,000 crore. Correct me if I'm wrong, sir. By the way, can you just help me in understanding the economics how the incremental CapEx in the smart metering space would be self-funded?
So what I was saying is that we will not be doing debt funding into it. We will be securitizing those receivables itself. So the INR 600 crore is over the next seven years. So I would use the securitization of that receivables itself to fund the new meters which are going to come up. So I don't have to fund it through the accruals of the transmission business to fund smart meter business. And based on that securitization of the receivables, I would be more than sufficient to fund whatever growth which is there in smart meter business or the existing projects of 2.25 crore meters that I have.
Okay. Okay. Got it. Got it, sir. Thanks for the clearance. That's it from me.
Thank you. Next question comes from the line of Pratik Duggal with IntelSense. Please go ahead.
Thank you for the opportunity. I had a question on our nine-month EBITDA bridge. I mean, if I look at the SC addition to the EBITDA, the jump in the smart meter is understandable. But can you elaborate on the transmission side as well? Because it has also seen a INR 300 crore jump. How do we read into this?
T he transmission business has grown generally because of the operationalization of three or four projects that got completed, especially the Khavda one, the KPS one, and the Sangod one, resulting in the additional revenues. And distribution business gave the steady state of INR 1,200-odd crores for the nine-month period. So from that basis, I mean, the largest part is coming from the operationalization of the new transmission projects which are getting completed.
So, sir, if I understand that, could I say that the SCA margin that we accrue or the SCA EBITDA, if it jumps, could that be a leading indicator for our operating EBITDA as well going forward?
SCA EBITDA does not lead to increase in the operating EBITDA. The operating EBITDA largely comes from, as the transmission projects get completed, that forms part of my operational revenue and the operational EBITDA. The CapEx that I do will give you an indication of the SCA margin that we put out in the income statement.
Okay. Okay. Thank you. That's it from my side. And one more, sir. I think if you're aware that sometime back in December, the CEA had come out with a proposal of some critical items. There was a list of some 16 items in which there were HVDC assemblies which were imported largely. So are you facing some challenges as per getting the procurement for HVDC valve assemblies?
No, we are not facing any challenge. In fact, for the recent HVDC project that we have won, which is Khavda Olpad, we have already finalized and closed the contract with OEM.
Okay. And that will be a foreign OEM?
Yeah. Yeah.
Okay. Okay. You don't have that contract with?
We have closed that contract with GE. And in fact, we have been able to, sorry. We have been able to agree with them for a schedule which is far more aggressive than completion schedule given in the bid timeline.
Okay. Okay. Thank you, sir. That's it from my side.
Thank you. Ladies and gentlemen, due to time constraints, we have reached the end of question and answer session. I would now like to hand the conference over to Mr. Kunjal Mehta for closing comments.
I take this opportunity to thank all the participants who participated in the call, and due to paucity of time, if we are not able to answer any of your questions, and if you need additional clarifications, we are just a phone call away. Just would like to end our comment with that we are now at a strong pedigree of completing our projects, especially the Mumbai HVDC and the four projects that we just mentioned, and based on that.
We are looking to have a capitalization of at least INR 25,000-odd crore in the next 12 to 15 months, so that is something which is very important as far as the transmission business concerns, and the smart meter pipeline where we have already completed the installation of close to 92 lakh meters and looking to complete the balance meters in the next 12 months or so. So both our transmission and smart meter business continue to have a strong degree of revenue translation which will happen in the next 12-15 months. Thank you all. Thank you for participating.
Thank you. On behalf of Adani Energy Solutions Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.