Adani Transmission, under the leadership of Gautam Adani, witnessed a decline of up to 3.5% in its shares on Tuesday following the release of its financial results for the quarter ended March. Although the power utility reported a remarkable 85% year-on-year increase in its net profit, the stock opened at ₹832 and eventually dropped to a low of ₹792.40 on the National Stock Exchange (NSE), causing the company’s market capitalization to decrease to around ₹89,600 crore. This decline comes in the wake of the exclusion of Adani Transmission from the Morgan Stanley Capital International (MSCI) index, effective from June 1, 2023.
Despite the positive financial performance, the company’s stock has faced significant volatility in recent times. It reached a 52-week high of ₹4,236 on September 16, 2022, but later fell to a 52-week low of ₹631.50 on March 1, 2023, shortly after the release of a report by U.S. short sellers Hindenburg Research.
Adani Transmission’s consolidated net profit for the fourth quarter reached ₹440 crore, which fell short of the ₹717.5-crore consensus estimate of analysts. The increase in profit was mainly driven by a one-time income of ₹148 crore from a regulatory order in the transmission business and supported by a mid-term true-up order from the regulator in Adani Electricity Mumbai.
The company reported a 17% year-on-year growth in revenue from operations, amounting to ₹3,031 crore in Q4 FY23. Additionally, operational earnings before interest, taxes, depreciation, and amortization (EBITDA) rose by 28% to ₹1,570 crore. Adani Transmission highlighted the contribution of new transmission lines becoming operational and a rise in energy consumption as factors behind the double-digit growth in consolidated revenue for Q4 FY23 and FY23 as a whole.
Adani Group chairman Gautam Adani emphasized the company’s commitment to delivering sustainable and reliable power supply across India while focusing on cashflow generation, operational excellence, and governance. The transmission business saw revenue growth due to the commissioning of newly established lines, while distribution revenue increased in response to a consistent rise in energy demand. Transmission EBITDA grew by 9% to ₹872 crore, distribution EBITDA jumped 43% to ₹834 crore, and profits in the transmission and distribution businesses also showed notable increases. Adani Transmission operationalized 609 circuit kilometers in Q4 FY23, with energy demand witnessing an 11.5% improvement driven by higher demand from the commercial and industrial sectors.