Adani Enterprises (NSE:ADANIENT) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Adani Enterprises Limited q one f y twenty seven earnings conference call hosted by MK Global Financial Services Limited. 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 by pressing star then 0 on your touch tone phone. Please note that this conference is being recorded. I now hand the conference over to mister Sabri Hazarika from MK Global Financial Services. Thank you, and over to you, sir. Yes. Thanks. Good evening, everyone. On behalf of MK Global, I welcome you all to the Q1 FY twenty seven post earnings conference call of Adani Enterprises Limited.

0:53 We have with us the senior management from the company led by Mr. Ravi Singh, Chief Financial Officer, Adani Enterprises Mr. Arun Bansal, Chief Executive Officer, Adani Airport Holdings Mr. Rajesh Poddar, Chief Financial Officer, Adani Airport Holdings Mr. Murali Krishnan, Chief Executive Officer, Adani New Industries Solar Manufacturing Mr. Manan Vakaria, Head of Finance, Adani Enterprises and Mr. Ditenza Khialya, Investor Relations, Adani Enterprises. So today's session will be an update on the results and outlook by the management followed by the question answer round. So now I request Mr. Ravi for the opening remarks. Over to you, sir. Hi. Good evening, everyone. Thank you for joining us today for Adani Enterprises earnings call.

1:46 As you know, AES portfolio comprises primarily of core infrastructure focused businesses, spending, energy, utilities, transport, logistics and primary industry. For the current quarter, our results are reflecting the discussions that we've had over the last one year on value unlock and various interactions over the year. The investments made over the last few years are now progressively moving from build out phase to value realization phase. Over the next few quarters, there will be a clear pathway visible for accelerated value creation from our diversified portfolio of assets, primarily led by airports and roads. The focus has now shifted from establishing capabilities to maximizing returns, continuing ramp up in operational performance and increasing overall asset utilization.

2:42 With the caveat in all of this being that we will continue to report historic CapEx numbers, and the one of the highest CapEx years of our business this year. We are well on track to achieving that. Moving to quarterly financial performance, all on consolidated basis. Total income increased to 33,546 crore. This was an increase of 50%. This is primarily driven by a reset that is happening in the business as our copper smelter is coming online. Highest quarterly EBITDA at 5,642 crore is an increase of 49%, again reflecting the businesses coming online plus specific price realization.

3:32 Continuing profit before tax stands at 1,295. The establishing business is EBITDA on Rajvi rising on account of capacity ramp up of our copper business. Certain project updates, we've signed a new contract in data centers for 400 megawatt, taking our total capacity to rough... Signed capacity to roughly one gigawatt. In the road business, the largest greenfield project of of Grand Expressway has been inaugurated and toll collections have begun in the... In in the middle of the quarter gone by. We accept the ramp up to complete over the six to nine months for for the road to be operate... Operating at full capacity. We've added another BOT road project of 620 odd lane kilometers.

4:20 Capital market, and we also like to thank all of you plus investors on this aspect, which is we did the largest QIP of 5,000... 15,000 crore of any nonfinancial corporate. This was about four times oversubscribed. Again, I take the opportunity to thank you and all investors who participated. This was very well received, and we are pleased to see the continued diversity in our shareholder register. I'm pleased to introduce some of our business CEOs, and we'll continue this trend of progressively bringing our CEOs who run our businesses on... Basis of which all these results are possible. Today, we have Arun Bansal, CEO of Adani Airports, and for the first time, Moli, who's CEO of Adani Solar, and they will take take you through their respective businesses.

5:12 First, I hand over the call to Arun, CEO of Adani Airports. Over to you, Arun. Thank you, Robbie. Good evening, everyone, and very welcome to this investor call. Adani Airports is one of India's largest private airport platforms, operating a portfolio of eight operating airports, contributing approximately 23% of India's passenger traffic and 29 of country's air cargo volume, underpinning our scale and strategic importance in India's aviation ecosystem. Adani Airport current quarter results demonstrate continued growth with resilience despite geopolitical headwinds. The international travel operations at our Navi Mumbai Airport have started from 07/15/2026, and will continue to accelerate during the year.

6:05 These results were led by tariff revisions at our Mumbai Airport, the start of Navi Mumbai operations and continued momentum in our non aeronautical revenues. Our non aero revenues are supported by expansion of non aero activities across all our airports. If I move to financial and operational performance during Q1, financial year twenty seven, passenger traffic was 24,200,000 passengers. Total income was INR3763 crores, which was up 39% year over year. EBITDA increased by 49% year over year to INR1633 crores. Aero and non aero revenue delivered robust year over year growth of 1653%, respectively, in Q1 financial year 'twenty seven.

6:56 We also operationally added seven new routes and one additional flight during Q1 'twenty seven. With that, I hand over to my colleague, Moruli. Thank you, Arun, and good evening, ladies and gentlemen. Adani New Energy Ecosystem is developing an end to end integrated ecosystem for manufacturing solar panels and wind equipments. As all of you already know, Adani Solar has featured in the Allied list of top 10 global solar panel manufacturer, and Adani became only Indian company in the top 15 global wind turbine manufacturers. I'm happy to inform you that out of our expansion plan of six gigawatts, we have commissioned module line of 1.7 gigawatts in the month of June 26.

7:50 With this, we have now total operational capacity of 5.7 gigawatt of module line and four gigawatt of cell line. We are on schedule to commission both module and cell lines to 10 gigawatt by end of this financial year. During this quarter, the domestic module sales have increased 340 megawatts, up by 107 percentage year on year basis. This demonstrates strong demand of Adani solar modules in the domestic market, also which has fully absorbed the export intake. Reflecting on this strong domestic demand, we have decided to close advanced authorizations in imports taken are also making payment of applicable duties during the quarter.

8:38 Moving on to the financials and operational performance of q one FY twenty seven, Module sales to one three four zero megawatts. Wind turbine sales to 64 sets, which is up by 83 percentage year on year. Total income at rupees 3,937 crores, and EBITDA, rupees $9.72 crores. With this, I hand over back to Mr. Roby. Thank you. Thanks, Murali, and thanks, Arun. I'll quickly quickly take you through the remaining segments. On the mining services portfolio, we have 18 mining services agreement with a peak capacity of 145,000,000 tons per annum. We are operating at currently at 55,000,000 tons, which is approximately 38% of the total contracts we have.

9:32 More importantly, as we continue to bring on new contracts for our operational stage, we will... We have taken the total available operating capacity in contracts operational to 93,000,000 tons, thus giving us a good ramp up over the next coming two to three years. During the quarter, dispatch volumes stood at approximately 11,800,000 tonnes, revenue at $11.74 and EBITDA at $4.21 CR. In the Integrated Resource Management business portfolio, trading volumes stood at 8,300,000 tons, revenue at 7,000 and EBITDA increased to $8.94.

10:17 This is largely due to price realization and the impact of geopolitics. For the first time, we are introducing copper portfolio into our numbers. I will lay out the plan for this. We will have much more detailed presentation on this in our December quarter results, and we will formally do a proper showcase of the copper business post the annual results in March. But as we stand today, our copper sales volume is at 64,700,000 tons with the capacity utilization now at 52%. Revenue at 10,922 CR, giving us an EBITDA of $7.49 CR for the quarter.

11:05 With this, we are open for Q and A. Thank you. Thank you very much. We will now begin the question and answer session. Star and one on your touch tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue is assembled. We take the first question from the line of Mohit Kumar from ICICI Securities. Please proceed. Hi. Good evening, sir, and congratulations on the raise of money to the QIP.

11:57 My first question is, has there any change in the CapEx plan for FY 'twenty seven and FY 'twenty eight after this raise of capital? Look, as I said in my opening comment, absolutely no. We are committed to the CapEx that we outlined at the start of the year, and we are actually tracking to that number very closely, and we will stick to that guideline. Understood. My second question is, can you help us with expected commissioning of, I think, broadly, I think we have now one gigawatt of data center. How do you think this ramp up will happen over the next couple of years? So I think we covered this in our investor deck also. It is on page number 15. So we we are expecting the capacity ramp up, the...

12:50 To hit about 500 megawatt over the next three three years. And then because most of the post that most would be large, and then every two or three years, a large addition will occur. So first large addition will occur in the next two to three years. We'll take us from current about 65 to over 470 megawatt operational. Understood. And I think you're talking about the Nyumbe phase two. Is is it... Are you planning the construction to start in F 'twenty seven? Or you think it is slightly longer term? I'll let Arun answer that question. Arun, please.

13:39 Sorry, can you repeat the question? My question was on November Phase two. Where are we right now? It will the construction start in F twenty twenty seven or F twenty twenty eight or it is a longer it is something will happen in the long term? No. The construction will start in this financial year itself. We are in very advanced stage of design work and excavation work will start as soon as the monsoon is over this year, this financial year itself. Understood. My last question, is it possible to share the defense EBITDA in the quarter and the last year, if possible? No. We are not currently going through that. It's not material at the moment, and we will we will go through that once we have set up the entire ecosystem, and we'll, at appropriate time, showcase that business.

14:34 Understood. Thanks. Thank you. All the best. Thank you. We take the next question from the line of Sandeep Kumar from Jefferies. Please proceed. Yeah. Good evening, sir. Congrats for good sales. My first question is with the top down. So where do you see your current, like, large businesses as airport and then data center is going to be a a big business in few years. So where do you see these businesses going in five years' time in terms of size, maybe in case of airport passenger or like size of the overall business from the overall company perspective? I think five years is difficult because we don't outline. We have outlined an overall CapEx plan for the portfolio all the way to two thousand and thirty, thirty one.

15:29 We can share that specifically for a for a year, which we have done on the roadshow during the QIP. We... I... We can note your question and we share that for the benefit of everyone, and we can put it up on the website again. But, you know, we we are at a point where, specifically with the airport, with Arun and team, we are at a point where increasingly the business is, you know, on a stand alone basis going exceedingly well. And as we have maintained that we will have... We will come to a decision point in relation to rewarding the shareholder of AER with with somewhere around in in 2028 in terms of this business being demerged.

16:22 And... But other than that, to directly to your question, we will actually point you to the AES offering circular and the roadshow presentation. But we take your question on note, and the team will update and upload the question for... So that it's available to everyone. Sure. Okay. Certainly, bookkeeping questions. What drove the interest expense sharply during this quarter, sequentially? No, that's largely because of the capitalization of large assets of Ganga Expressway, airports, but no no specific large scale change has occurred.

17:11 If you see the the data, I'll point you to the page on our... In our presentation. If you go to page number 25 of the presentation, it will give you the full detail of the current debt stack of the business and the ratios attached to that. So there's no material significant change that has occurred in any 112 unless I'm missing your question and we have some follow-up question detail on this that I'm not able to ascertain from your question. My question was like particularly because you commercialized Nambi Mumbai like prior quarter, copper was already commercialized. I also thought that the NLIGHT fixed rate was also like partly commercialized earlier.

18:00 But INR 700 crore on a Q on Q basis, there is a swing. So that was my question. Also, like now, are you looking at like for the INR 9,000 crores interest expense for the year? That's largely because the assets are capitalizing. So the interest payment is coming on to our books. But that is a change of the on a consolidated basis, the 1905 becoming 2004, that directly linked to the asset capitalization. Sure. Just a couple of other questions. So on your mining services performance was like big muted and in terms of volumes, while trading IRM business EBITDA was very strong. So how are you looking in terms of volumes in these two businesses?

18:59 Mining services will continue as it is. Like I said, we are currently at about 40 just 149,000,000 tons dispatched. We expect that the with the new mine coming online, we expect somewhere between the range of 16, 20% growth in the in the mining services in relation to... Simply because one new contract's now operational. And in the item, I I would... We we we like to caution a little bit in the sense that it's more important to look at the... Of the volume. The volume is consistent. The swing that is occurred is largely due to the geopolitics, and and it can... Can sustain for a period of time, but that's that's a volatility induced increase.

19:53 Sure. I'll get back to the queue for questions later in the call. Thank you. Thanks. Thank you. Before we proceed with the next question. We take the next question from the line of Girish from MS. I had first question was on airports. So congrats on very strong non aero growth, almost 53% for the passenger growth of 4%. Wanted to understand what part of this growth is driven by Navi Mumbai. I understand you will strip off that the organic portfolio has done well.

20:41 If you can highlight some of the key strategies that you guys are focusing on, I understand the digital app is a key part of that strategy. Should we look at similar growth rates continuing for the full year or how we should think about the full year non revenue growth? Thanks. That's my first question. Harush? Shall I take yes, no, thanks, Ravi. So you are absolutely right. The non aero growth to a very large extent is driven by increase in our IPP and also the ATV per passenger, not so much by Navi Mumbai because Navi Mumbai is scaling up. As I said, the international flight only started post the closure of Q1 by July 15.

21:26 But we see growth across all non aero verticals duty free, F and P, lease and rentals. And we also started one new line of business, which has started to be meaningful in the financials in terms of ground handling business from this year and which will be recurring business for every quarter for us. And how should we think about the annual number? Like any guesstimate on how the growth could be for the balance part of the year, particularly non So non aero? Aero, I mean, of course, it depends on the current geopolitical issue where this has hampered the passenger growth significantly, especially the international passenger.

22:11 So if the growth comes back in the international passenger to as planned, you should see the similar growth continuing during the year. Secondly, just on the roads portfolio, I don't see the EBITDA, maybe I missed it. If you can quantify what's been the EBITDA for the quarter, given that the Ganges Express has also started? The Roads EBITDA is $2.88, and we expect it to continue to ramp up because Gangax was nowhere near close to its capacity at the moment. It's ramping up, and we expect the ramp up to continue and stabilize over the next nine months to twelve months.

23:01 And my last question is on copper. So very strong and sharp improvement. Any one offs here? Or should we expect this run rate of, let's say, between INR $7.50 crores to 800 crores per quarter going into the balance three quarters of the year as well? I think I I would just like to... Whilst we are very happy with the result, but I think as you understand, in the... In... It's it's a it's basically a a a, you know, a specific business in relation to its process. So so we expect the... That the the EBITDA margin on sales, which currently we... This year... This quarter has been about 7%. Long run, we expect that to be about closer to the 5% range, and... But we are currently at 52% utilization. So so you expect the utilization to head towards 75%.

23:57 And and and, consequently, with that kind of utilization increase, with the the stable quarter on quarter EBITDA, yes, we expect that to remain in this 800 range. But as the capacity ramps up, mathematically, the EBITDA will go up. But the... Please be mindful that currently on ten thousand ten thousand nine hundred, our EBITDA is 749, which is roughly 7%. But in the longer run, we'd expect that number to be about 5%. Although the the revenue number will be lifting significantly from here as the lines are lines and the ramp up matures. Thanks, Ravi. I'll follow back in queue.

24:45 Thank you. We take the next question from the line of Manish Somaya from Cantor. Please proceed. Would request Mr. Manish to unmute and then speak. Can you hear me? Hello? Yes, we can, Manish. Okay. Awesome. My apologies. I always have this issue with my phone. Maybe a question for Arun. Obviously, the airport business is growing nicely, very impressive business overall. Is that a milestone that we should be thinking about in terms of breakeven for earnings before taxes type metric?

25:37 Obviously, we see EBITDA moving much, much higher, obviously, at the depreciation associated with the growth, the start up costs, etcetera. But how should we think about profit before taxes on a breakeven basis for that business? I'll take that. It's largely in terms of the technical finance part. And obviously, the business side, Arun can comment. Arun, please feel free to comment when when when you want to proceed. But just on the... Manish, the way we look at the the structure of the APO business is that it's a RAP based business. So so the the the... It... The more important thing is what is our RAB regulatory asset base changes, and consequently, is the RAB income that will occur from the increasing regulatory asset base.

26:26 So Mumbai has added added a lot of regulatory asset base, and we expect our regulatory asset base to rise actually from current 37 odd thousand CR to close to 70,000 CR. So so it's a RAV growth, and then consequently, the the regulatory return permitted. The the the metrics that we would... We... And we will introduce that as we go through over the next eighteen months, which are, like, the gross spend rate of the consumer. We report that number. Arun mentioned his opening comment as well. Gross spend rate of people visiting at the airport, and we will continue to, as Arun also indicated, that we will able to review business segment. We will continue to add and provide clarity on that aspect. On the P and L side, that is your question in relation to P and L side, we will still remain a heavy depreciation business because we are adding so much asset base.

27:21 So the the... We will start reporting as... Over the next twelve months, a a cash earnings on the on the asset base, and consequently, you'll be able to track a number called cash per share of the business. And we will we will... We'll provide that visibility to the to the market on that. But for the foreseeable future, just given the rapid rollout of the asset base, we will still remain heavy depreciation business in relation to post depreciation and and PAT number growth and the conversion of that. But on the cash flow conversion to cash per share, we will be we'll bring that out over the next twelve months in a much more clear manner.

28:08 Okay. Now that that's super helpful. Arun, would you wish to add anything on the business side if I missed or No, Robbie, you covered it very well on the business side. I think the biggest milestone for us in next three quarters is to get Navi Mumbai at operating per quarter of 20,000,000 passengers. So that's what our immediate focus is. Okay. Thanks, Arun, for that. I did want to touch on Gungai Expressway as well. I was hoping to see more of a profit boost as far as Q1 and also surprised to see revenues at least weaker than what we would have expected even, you know, vis a vis year over year.

29:00 So I'm I'm just trying to find a path to how we can see an improvement going forward. Are we being too optimistic on our side versus what's happening on the ground? Maybe if you can kind of reconcile that for us that would be helpful. No, actually no, we are not being we're certainly not being optimistic. I can tell you that much, and and we are being very cautious in what we are saying. And the reason is reason is that when asset of that scale, which is actually a trunk asset, is coming online in a major state in in India, which is UP, the the the procedures that they have to go through to approve... So they actually... The toll collection only began on May 15. I see. And and and...

29:54 Sorry. Go ahead. Go ahead. I'm sorry. No. So then we... So that's why, as I said in my opening comments, we expect this to be a massively successful toll road just based on the initial indication. We have ground indications. So I was there actually in Lucknow as well myself. So so so we've gone through this. We are extremely confident that this will be a massively valuable asset, not just for us, but actually for the state's economic architecture also. This is a trunk road. I would compare this to what the Cross Malaysia Highway did for Malaysia. This is going to do that for UP. It is that critical infrastructure for Utoplank. When you're on the ground, you actually see already start seeing the impact of this. You're certainly going to get a massive uplift in SME, MSME manufacturing clusters around the defense ecosystem in this area, largely driven by now the connectivity of this road.

31:04 So so we are extremely confident. We... If you wish to have some specific answers that you believe we we are not not... Or you think we should clarify more, we are happy to take advisement, and we will try to make sure that at least in the in the in the next results, we we lay it out in more detail so it's... It clarifies. If if any suggestion is there, please do so. We're happy to clarify. But we are extremely positive about the business overall and on... Based on the ground reality that we are going to... There will be an upside surprise rather than anything else. No. I think the clarity you offered is helpful. I didn't realize that the toll collection only began May 15. I had the full quarter in my estimates.

31:49 So maybe it's where, you know, I was off. And, of course, you know, I've seen pictures of the highway, and it's super impressive. I congratulations to the team of doing that. It's just absolutely fabulous and hopefully it works out the way you anticipate. On the data center side It's even better than pictures, Manish. It's actually in in... The contrast is even more stark when you are there because you see surrounding and then you see this highway. Right. You certainly think you are in first world country when you're on the highway. Obviously, you know, within a second, you back in developing country. But, nevertheless, once you're on the highway, you feel like you're in the first world country. Right. No. I mean, the pictures have been amazing.

32:35 Just one last question on the data center. I think you talked about the nine sixty megawatt of tied up capacity, but I guess only a small portion is operational. So how should we think about the CapEx per megawatt or customer funding or prepayments when it comes to developing that? I think just on the CapEx side of the data center, we will specifically come back to you if you don't mind on the question, but we do expect that that we are...

33:21 If we are to give you a per megawatt, today, I can give you the range, but we can obviously clarify that in more precise detail because we do have the information. So we are roughly around, say, say say about 70 to 75 CR per megawatt in terms of construction. And a run rate return, which is US dollar equivalent of approximately 12%. And the ramp up structure, now that hypers... Now the ramp up... The construction is now moving to the hyperscaler format. So the next construction period will add bigger chunks to the business. So the... So it's just going through... Currently, it's going through the sort of 50,100 megawatt type additions, but it'll move to few 100 megawatt of additions at each construction cycle, which is roughly about two and a half years. So in the next three years, we expect to add.

34:20 We'll take this capacity closer to 500. So five times what it is today. More than 5x, about 7x 7x 8x what it is operationally today. Right. Super helpful. Thank you so much. Good luck. And hopefully, we'll catch up soon. Thank you. Absolutely. Thank you. Thank you. We take the next question from the line of Aditya from Kotak Securities. Please proceed. Thank you for the opportunity and congratulations on the strong set of results. Have two questions from my side. The first one on airport. We've been possibly surprised with you doing much better non aero per patch for this quarter at about INR $8.80 also.

35:12 Wanted to check whether there is more headroom available to go beyond that INR $8.80 per pack that you reported, which is meaningfully higher than that level set here. Arun, please. So I will take this. So as I explained, one part of the growth this quarter was ground handling business, which we only started last year post Q2. The second part is, yes, there is still a lot of headroom left for growth in non aero with three different initiatives. One is, as I said before, the digital initiative. We started to engage with passenger much before they have come to the airport. Second is engaging with the non passenger with meters and meters, which is two, 2.5 times the passenger.

36:00 And the third is the city side development, which we have started to do and will go live from financial year 2930. Then within the non aero business inside the terminal also, we are doing a lot of premiumization with the GDP growth and the estimation of India. So we believe there is a headroom to increase the ATV for us for transacting passengers inside the airport by giving them better offering. So we are upgrading lounge experience, we are upgrading F and B experience, we are upgrading retail experience to meet the aspiration of young India. Understood. Related question, the big uptick that is happening in lease and rentals, is it linked to more the retail space getting deployed at your assets? Or is it primarily to do with higher footfalls happening?

36:50 No. So as I think the beginning, Ravi said that this quarter, because of unfortunate Middle East crisis and the higher ATF price, the passenger increase was only 4%. But primarily, the growth is coming from higher ATV, but also us monetizing what we used to call dark space. So we have increased significantly the retail and F and B space over the last eighteen months at our airports. That clarifies. The second question I had was more on the data center front. Could you give us more color on the 400 megawatt order that you have recently won? And whether with the same customer, there is hope to do more work or whether there is any kind of framework agreement that you may be working towards it.

37:40 Yeah. I mean, this is... We we we can't really add anything more to this because we only publicly shared with you. This is part of the Google contract adviser. Mhmm. What we are supporting is what is the part of that contract actually executed. The other parts which will get executed as we go along. But overall contract is available in... Available publicly and available on our website. We take the next question question from the line of Bipla from MK Global. Please proceed. Hi. Thank you for taking my questions, and good evening to everyone. So my question is on the question is on the city side development.

38:32 Our understanding is they have a huge land parcel in Mumbai as well as in Mumbai. And Mumbai being in the city center, it would be more lucrative. So what would be the total in terms of square footage development potential in this city side? And what do you think would be the CapEx requirement for this city site development for the next five years? Shall I take, Ravi? Yes. Yes, thanks. So total land available for us across all eight airports is six sixty acres. Phase one, we are only doing 22,000,000 of construction, 22,000,000 square feet of construction, 14,400,000 of super built up area across Mumbai, Navi Mumbai, Lucknow, Jaipur and Ahmedabad.

39:26 That will go live 2930. And the Phase one CapEx we have committed is around INR 20,000 crore for that. That INR 20,000 crore will be for how many years that will be? For Phase one of this INR 22,000,000 super built up area, 14,000,000 or construction area and INR 14,400,000 retail space available. So I mean in how many years this CapEx? This Phase one will be completed by 2930. 2930. Okay. And this entire development, would you give I mean how how do it work? You'll give it to some real estate there or you you you your airport, AHL would itself develop it? I mean, or you would you give it give it to some developer, you'll say, just take the lead center? How how how Phase one, we are doing it within the integrated development. This is a mixed use integrated development, which will consist of hotel, retail, f and b, entertainment zone, high end offices.

40:33 And this will be done under AHL, but of course the construction will be done by the D and C partners. Okay. And what kind of rental or EBITDA do you think this development expected to generate? Ballpark would be fine. Sorry, that we cover that once we are ready to disclose as we start moving with the rental retail mix contracts because we don't want to be highlighting that level of work that would become very difficult for us to main... Maintain That's particular disclosure standards. Yes, sir. And just one final question. Have you commenced the work for this city site development?

41:26 Arun, please. Sorry. I didn't get it fully. Sorry. Can you please repeat? We know we know we started the work on city side development. Yes. We have started the... Sorry. Mumbai, Navi Mumbai, Lucknow, Jaipur, Guwahati, and Ahmedabad. Four places active construction going on, Ahmedabad, Mumbai, Navi Mumbai and Lucknow. Jaipur and Guwahati, we will start post monsoon. Okay. Thank you, sir. And all the best, sir. Thank you. Thank you. We take the next question from the line of Kartik Kohli from Kotak Securities. Please proceed. Hi, sir. Thanks for taking my question. Just wanted to... Just one quick question, and I wanted to understand.

42:15 So when we look at your segmental breakup that you've given versus the reported numbers on BOC, there's a EBITDA, including other income that is left is about INR $9.72 crore for this quarter, and this number was about INR $5.60 crore in the base quarter. So can you talk more about what is driving this change? What are the key businesses? Now we understand this is a lot to do with defense, bunkering, all of those things. What what is driving this update? Because now the other segment itself is bigger than, you know, copper and mining services. So just wanted to understand how this is running out. What is the key business driver there? And can we get to see disclosures on these accounts over the next few quarters? If that leaves any question.

43:10 Think where are you getting the others EBITDA that you're saying? Because we don't think I was just comparing the numbers that is given in the presentation for each of the segments, airports and then IRM, mining services and copper. I'm comparing those with the overall numbers that are even on BSC for the consolidated AEM. So there, I get the overall EBITDA, including other income at INR 5,641 crores. I'll just I get the question. So what we... In the others included commercial mining, which is three seventy two of the number, roads, which is two eighty eight of the number.

43:59 So the 600 of that number is just these two businesses, and then a chunk of that is also a significant chunk of that is what the main is also defense business as well. So the majority of it, the the number is covered by these two business, commercial mining and roads itself. Got it, sir. Thank you so much. Thank you. Before we proceed with the next question, a reminder to the participants, in order to ask a question, We take the next question from the line of Girish from MS. Please proceed. Thanks for the follow-up. Couple of questions. Firstly, on defense, the subsidiary had up, I think, last year, done revenues of INR 2,005 crores, 2,600 crores.

44:54 I wanted to understand how should we think about the order book right now that the company has? And in terms of growth outlook for the year or for the next few years, how should we think about the growth in that business and CapEx for that business? I think your numbers you're referring to, Girish, which we mentioned out in the QIP and QIP roadshow and presentations. What we are planning to do, Grish, is that sometimes about September next year, we'll be in a position to lay out the proper strategy and the business update. And we are we are planning that that in post September next year in November, we have the overall defense strategy showcase.

45:40 So to provide the clear visibility. But what I can say to you is that this... That the growth that we have exhibited, we are tracking to that, and we expect this to be a a business of sufficient importance that it will come into our segmental reporting over the next eighteen months. Okay. Just a follow-up on data centers. So obviously, at INR 70 crore CapEx per megawatt, how should we think about funding on the debt side? Typically, infra projects go up to 70%, 80%. So should we assume that? And what could be the typical interest coupon and financing?

46:25 Will it be like a debt funding with like long tenure? If you can talk a little bit on that. And with hyperscalers being your customers, is there a possibility of some dollar funds also being spoken about because you spoke about dollar return? Yes. So to this, Girish, the way we set this up, we were one of the first ones to... In India at least or in Asia as well to look at it not as property finance, but as project finance. So we we got this originally set up in the manner that more consistent with infra projects, given that we wanted to have a service and energy model locked in together with the... With our final users of the data center.

47:20 So we are looking at a more traditional infra type funding, and we are looking that this business will track close to investment grade. So so the coupon expectations will be in line with the investment grade debt. The tenor in terms of this, we will... We... Once we reach a point where we're looking to put the long dated paper out, you are looking closer to... We'd like to maintain a duration in this business of, say, around seven years, which is about, you know, from an underlying contract life perspective, say, that... Which is... We have good reasonable visibility over ten years. So so we will... In that... For... From that point of view, track the duration in line with our overall portfolio duration, but could be slightly less. So you you you you... The benchmark would be a a a sort of, say, a long five investment grade bond on a sustainable basis.

48:27 Understood. And just in terms of data centers again, you know, Adani Group has been able to scale up this portfolio in terms of contracted capacity quite meaningfully in the last twelve months, probably regionally in the region, Asia region also, it will be among the fastest growing. Wanted to understand what do you think is very different in terms of the offerings that Adani Groups brings to the table, or is it also a little bit on the pricing side, which allows Google to kind of take or or any hyperscaler to take a decision. And just a risk because I was getting a lot of questions on this on execution when we're thinking three to five years.

49:18 A lot of the equipment could also be import dependent. How are you planning right now as you keep scaling up this business from a three to five year perspective, certain import equipment requirements that could come through? I think it's an excellent question. I think I'm I'm glad that you bought this up. It is just clarify a couple of things, and and I'm I'm... Actually, we should have addressed this ourselves. But nevertheless, now you have the question, so we'll answer. I think the way you'll... You will see that we made the announcement that we've agreed the JV with Jabi. So that addresses the question of us being able to provide the stack capability to the final client. So to that... To eliminate that risk.

50:04 So so which... So we will we will be able to provide the the... Some... At least the physical build of those physical stack. Now there's... Within the stack, you'll have the GPU, sir, which is a... Which the final client already has. So that that that part. And we'll continue to to embed ourselves deeper in this infrastructure chain of of this area. But that's not from data center point of view, but that's overall overall... The overall stack that is required for the AI world that is coming. So so that's being done from that basis. It helps the business. Second part is that why we are able to grow faster is that we have very large utility platform that can accept some level of merchant risk.

50:54 And because we can provide the energy solution, because what something... The thing that is stopping the fast ramp up is the... Being able to tie up the energy equation. In The US, obviously, the data center and and and hyperscales have gone on the mechanism of building it out themselves. But here, we can offer them that facility. And that is what is more attractive to them than anything else. So our pricing and everything is is broadly the same as general market in the region. But the unique defining feature is we are... In the private sector, India's largest utility platform. And end to end, we are the only utility platform of that, including the government. So So consequently, we are able to offer a utility level solution in relation to their energy requirement.

51:46 And that that part is a defining difference, and we are adding services like JV with Jabil and our capacity to bring in the ecosystem, which is common in The US and common in Europe, common in China, we are able to bring... We we will bring that ecosystem in India also, and that helps us to derisk some of the construction and development activity. Understood. Just one small typo. I think in the presentation, we've written two gigawatt by 2030. I believe the Chairman in the AGM spoke about the portfolio being now three gigawatt. I know it's an evolving number, but just wanted to highlight that. Thank you for that. We will clarify. Actually, it's a good pickup. It's number is three gigawatt.

52:36 Thank you. Thank you. We take the next question from the line of Alok Diora from Motilal Oswal. Please proceed. Good evening and thanks for the opportunity. Just had one question specifically on data center. So when we say operational capacity and when we're also giving tied up capacity, so typically, how much time it should take for some of those tied up capacity to get operational? That is question one. And second question is related to that, that would we see a case where our realization per megawatt would also increase as we as the mix improves to more of hyperscalers?

53:21 So yes, this would be the question. I think to the second question first, these are discrete steps driven by business case. So you... Either the scale itself or hyperscales don't change the yield metric because it's driven by the specific business cases they have for the requirement they have. So it is... So from their their point of view also, they they want to go through a specific set, so there's no that, okay, we are... We we got hyperscaler and scaling up and the yields going, no. It will depend on business case. We have... Overall, the economics are very good, so so we are confident of that. To your first question, roughly speaking, construction and development is about two point five years, then two and a half years. Then you have the take up of the stacks by the scalers themselves, which is also saved another eighteen months. So roughly speaking, from from the capacity contracting to fully ramping up at at that contract, you can say about forty months to to forty eight months.

54:23 Got it. So so when we are giving 2,030 target, that's that's for the tied up capacity maybe? Correct. Correct. Correct. Okay. So any sense or indication that by that time, what would be the kind of the operational capacity or any ballpark number there? Because the revenue and EBITDA will be more linked to the operational capacity from that perspective. Yes. We expect that we will add in the next two point five years roughly about 400 megawatts or slightly higher than that. Got it. Got it. Just one last thing on the roads portfolio, what would be the invested equity as of the end of the first quarter, if you can highlight on that number?

55:14 Do you mind if we come back on that, we take that? Sure. Put that as a Sure. No problem. Problem. Thank you so much. Thank you. That's all from my side. Thank you and all the best. Thank you. Thank you. We take the next question from the line of Aditya from Kotak Securities. Please proceed. Thanks for the follow-up opportunity. Just a clarification over here. As in while the company has clarified that on airlines, there is no plan of the there are news flows that are still coming about suggesting that Adani Group had asked for permission to launch an airline in June. Could you just clarify how to read these statements here for investors in general? See, sir, I I I will answer that for you. I think more than airlines, we should get into newspaper business because, you know, so so many newspapers make money from us.

56:11 Okay. Now now, you know, it's almost like watching a poor version of the vendor again and again. So it's just rumors. We we always evaluate. See, when the next round of airports comes, there'll be regional airports. Okay? We... If the current ability to support an airline business is up to 5% equity. Okay? We put a letter to... In which you have seen. And that is to... We we want to see as owners of airports and regional airports hopefully in the future. That India regional airline system also develops and develops properly. So in that context, not starting an airline or... But to be able to support a development of an airline for the regional connectivity is the... Is our interest.

57:08 Okay? Now... So... And that will be a clarify. So AEL has no interest in airlines, and we clarified that. We are focused on our airports business and and build... Roll out that infrastructure. That's a separate thing that we want to be participating. We want to be able to advocate in an industry as an interested actor in that industry to see the development of regional India. And I think we should see it in that context, not in the rumor mill and desktop type analysis that go on or lack of analysis that goes on in our newspapers and TV channels. Because just our name sells, so they just attach our name and just run with absolute rubbish. And I cannot be more clear with these words.

57:57 It is that it act... Arun runs a business, which is one of the leading businesses in the country in airports. We will likely be have regional airports. We already have some of the regional airports. It's our interest to see the development of the regional transportation infrastructure. And if we try to advocate for something that we'd like to support that infrastructure in some way, it doesn't mean that we start running an airline. And people just read that as as some sort of a a a... An immediate action. It's not an immediate action. It is our interest and an actor in transport and logistics, sports, roads, airports, to make sure that the regional connectivity, regional economy develops properly. And it's really sad reflection on the state of our media that rather than looking at the positive of what we are trying to do for regional India, they come up with this economy scheme of airlines, this, that, other.

58:57 We are doing the same thing for road networks. We are doing the same thing at ports. We are doing things in our internal logistics. You know? If all of that, we have start... We have to... Tomorrow will become Zimato? No. We are interested in internal logistics. And and it's just... It is unfortunate, but that's the reality. Yes, sir. On that comment, just a housekeeping question, if you could give us the WTG businesses revenue and EBITDA for the quarter. I'll just... Moli will take this question. Moli? Yes. So WTG, the revenue was INR $8.66 crores, and the EBITDA was INR 185 crores for the quarter.

59:45 Understood. Thank you for your responses. That will be all from my side. Thank you. Thank you. As there are no further questions from the participants, I would now like to hand the conference over to the management for closing comments. Over to you, sir. Thank you very much to MK Global team for organizing this call for us. I also like to take the opportunity to thank our fellow... My colleagues is Arun, CEO of Apos Business Moli, CEO of Solar, a new industries business and Manan and team. And once again, thank you very much for your participation, and thank you for the questions. Thank you. On behalf of MK Global Financial Services Limited, that concludes this conference.

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