Ladies and gentlemen, good day, and welcome to the Adani Enterprises Q2 and H1 FY 2023 results update call hosted by Nuvama Wealth. As a reminder, all participant lines will be in the listen-only mode. 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 and then zero on your touchtone phone. I now hand the conference over to Mr. Parvez Qazi from Nuvama. Thank you, and over to you, sir. Good morning, friends. On behalf of Nuvama, I welcome you all to the Q2 FY 2023 conference call of Adani Enterprises. Today we have with us from the management side, Mr. Vinay Prakash, Director, Adani Enterprises and CEO, Natural Resources, Mr. Robbie Singh, the CFO of Adani Enterprises, Mr. Saurabh Shah, Finance Controller of the company, and Mr. Manan Vakharia from Investor Relations. I will now hand over the call to Mr. Robbie Singh for his opening remarks. Over to you, sir. Thank you so much, and good morning. This is Robbie, CFO of Adani Enterprises. I welcome you all to the earnings call to discuss the quarter two FY 2023 results. AEL continues to create value for its shareholders as a successful incubator for the past two and a half decades. This incubation model has created leaders in the respective sectors like ports, transmission, green energy, city gas distribution, and FMCG. The compound annual growth rate delivered by for Adani shareholders is in excess of 38%. These businesses, Adani Ports, Adani Energy Solutions, Adani Green Energy, Adani Total Gas, Adani Wilmar, have also over the past decade exhibited growth greater than 20%. AEL holds a portfolio of businesses, both established and incubating, which are spread across different verticals in energy and utility, transport and logistics, direct to consumer, and our primary industry vertical. Within primary industry verticals, we have established business with mining services, integrated resource management, and commercial mining. As our established businesses continue to sustain long-term growth, we are making significant progress in our attractive incubation pipeline. Within the incubation pipeline, our core area of utilities has Adani New Industries, which is our green hydrogen vertical, and AdaniConneX data center business, which is a joint venture with EdgeConneX of U.S. On the transport and logistics side, we have Adani Airports, Adani Roads, and Adani Wilmar currently sits within the Adani Enterprises shareholding. In this journey of value creation, Adani Enterprises has always embedded ESG in its business philosophy, and it has been now validated recently. I am happy to inform you all that Adani Enterprises has been ranked seventh in ESG rating amongst its peer group in the world by DJSI as a global. Adani Enterprises has scored 51 out of 100 against the industry average of 21 out of 100. AEL made good progress from a score of 18 to 51 during the last year, reflecting commitments toward environment, sustainability and governance. This is a remarkable achievement considering the diversity in the business profile of AEL. Now let me give you a brief update about various incubating businesses. In Adani New Industries portfolio, our manufacturing ecosystem is all the way from polysilicon to ingot wafers to cell module, wind turbine, electrolyzer. That construction and development of this manufacturing vertical is well underway with recent installation of 5.2 MW wind turbine, which is currently undergoing certification. We expect the green hydrogen generation to start sometime end of calendar year 2025 or beginning 2026. We are also continuing to develop the downstream products like ammonia and urea. Once we complete our investment in this vertical over the next nine years, it will be approximately $50 billion. During this quarter, a milestone was achieved by our manufacturing part of this business with 2 GW of TOPCon capacity for cell module line being implemented. The existing 1.5 GW capacity will also be upgraded to 2 GW capacity with the latest TOPCon technology and will be ready by middle of next year. On operational aspect, Adani ecosystem module sales were 206 MW, and EBITDA itself stood at INR 52 crore. These numbers are small compared to where this business will be, but it just highlights the fact of each individual component being cash flow positive in its own right. In Adani Airport Holdings, passenger movement is now at approximately 90% of pre-COVID level, with total passenger movement being 16.3 million passengers. Construction at Navi Mumbai is continuing at pace and is on schedule for completion in 2024. Adani Road portfolio is now approximately INR 32,000 crore. We recently also announced an acquisition of Macquarie's road portfolio in India, and we expect a continuing surge in the growth of this portfolio and its contribution to the EBITDA. We have commissioned our first data center in Chennai, and this will finally be 33 MW data center, 17 MW of which is now operating and occupied. This facility can be powered 100% by renewable energy from day one to minimize carbon footprint, and all of our data center business will be so enabled. Coming to financial performance. Total income rose 183% to INR 38,441 crore. EBITDA rose nearly 70% to INR 2,136 crore. The PAT increased by 117% to INR 461 crore. These performances are also in light of the fact that we have heavy CapEx businesses like airports, roads that are part of the portfolio in consolidation. As this matures, we expect the PAT to rise significantly. I will pass on to my colleague, Vinay Prakash, to take you through the Mining Services, IRM, and Commercial Mining business. Vinay, over to you. Thanks, Ravi. If I am currently in Australia, please pardon me if you get some disturbance from here. There's issue of connectivity also. As for the Mining Services business is concerned, Adani Enterprises Limited is the pioneer of MDO concept in India with an integrated business model that expands across developing mines as well as the entire upstream and downstream activities. It provides the full service range ranging from seeking various approvals, land acquisition, R&R, developing the required infrastructure, mining, beneficiation, and transportation to the designated consumption points. Company's MDO eight coal blocks and two iron ore blocks with combined peak rated capacity of 100+ million metric tons per annum. These fields are located in the state of Chhattisgarh, Madhya Pradesh, and Odisha. The mining production volume in quarter two FY 2022 stood at 5.4 million metric tons, and the dispatch stood at 4.9 million metric tons. The revenue for Mining Service for the quarter stood at INR 420 crore and EBITDA stood at INR 207 crore. As for the IRM business, Integrated Resource Management business is concerned, we have continued to develop business relationships with diversified customers across various end-user industries. We remain number one player in India and endeavor to maintain the leadership position going forward. The volume in quarter two FY 2023 increased by 6% to 25.2 million metric tons on year-on-year basis. EBITDA for the quarter has increased by 126% to INR 1,112 crore on account of high volume on year-on-year basis. Thank you. We can open for Q&A now. Thank you very much, sir. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may enter star and one on their touchtone 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. Anyone who has a question may enter star and one. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question is from the line of Mohit Kumar from DAM Capital. Please go ahead. Yes. Good morning, sir, and congratulations on a very, very good quarter, especially very strong number on the coal trading business and installing the largest wind turbine, a single wind turbine capacity in this country. My question is, firstly on the coal trading. I think numbers are, you know, very, very strong, especially the first half, around 50 million tons, which is like a very, very high market share. How do you think this will pan out in H2? Do you think there is a decent decline, or do you think the possibility that we can continue at this strong rate in H2 also? Thanks for the question. In fact, as we have been telling always, and we maintain that again, that in coal trading we are the service provider to the industry. We supply coal to them, as per their requirement. Considering that there was a lot of supply demand gap in H1, we were in the right position to supply to them that quantity. I think that's something which should give you an insight that your company has actually been in position to complete the requirement of suppliers and supply to these customers. As far as the future is concerned, we strongly believe that we are in position to continue having similar or higher market share, and industry will require a lot of coal to get imported. Considering that this volume is something which has gone up far compared to last year, we are very confident that we will be in position to get similar or the around number only in the next half. From the coal mining side, a very soft quarter, given that there's a high requirement of domestic coal. I think, are you still on track to have the 40 million ton for the FY 2023? Second question is, when do you think, you know, commercial coal mines will start becoming operational? As far as mining is concerned, considering that quarter two always remains a soft quarter because of the rain around the mining area. We are going to put in a lot of efforts to make sure that we achieve the target of 40 million by seeing that we might be around that volume only. Chances of going up, going beyond that, is low, but we'll definitely do our best in the next half and especially in quarter four to achieve a higher number compared to quarter two. As for the commercial mining is concerned, I think the first mine which is going to see the production is going to be the Dhirauli mine in MP, and we are confident that this mine should start in FY24. Oh, interesting. My last question, what was the profit for Adani Airport Holdings in current quarter and half year? Are we sharing that number? It's the- One second. Hello. Yeah, the numbers are already shared in the investor presentation. Okay, got it. The numbers are in the revenue for H1 is INR 2,573 crore and the EBITDA is INR 1,034 crore. Sir, profit numbers. The PAT numbers, from our perspective, the PBT is in line right now. It's improving. It's -91% as of now, but it's improving on a constant basis. We look at it more from the EBITDA perspective. Understood, sir. Understood. Thank you, sir. Thank you. Understood. Thank you. Thank you. Our next question is from the line of Apoorva Bahadur from Investec. Please go ahead. Hi, sir. Thank you. Thank you for the opportunity. Just wanted to understand, on the solar manufacturing side, the module manufacturing side. Have we placed the orders for our TOPCon capacity? Sir, can you elaborate as to what you mean by that? What's your question? The module manufacturing capacity which we are going to set up, which we intend to set up, have we placed the orders for the machineries over there? If not, by when? It is actually 2 GW is already operating and another 2 GW will start operating middle of next year. Sir, our plan was to hit, I think 10 GW, right? The plan is a total capacity of 10 GW. 4 GW will be ready middle of next year and it will continue to increase from thereafter. Okay. Also on the wind manufacturing side, how much capacity are we targeting and what all will be manufactured in-house and what will we be sort of procuring from others? Majority will be manufacturing that. TotalEnergies capacity target is 10 GW for wind as well. Procurement from others will be negligible. The entire ecosystem, almost to the level of 99% will be indigenous. Okay. We'll be making the gears and everything as well. That will be part of the supply chain ecosystem. Yes, we will be the prime manufacturer. Okay. Sir, any plans of then foraying into offshore wind as well? Because I believe that they require larger turbines. No, not yet. Because currently we are full up on the internal capacity on onshore capacity. We will continue to evaluate as to how we develop offshore depending on if and when it is economically feasible. Fair enough. I think lastly, just wanted to check if we have finalized the electrolyzer technology tie-ups and all. What stage is that in? Sorry, can you repeat that question? Just wanted to check on your electrolyzer, technology tie-ups, given that we intend to start manufacturing hydrogen by end 2025, early 2026. I believe we will have to set up the factories, et cetera, well within, say, by end 2024. Yeah, no. That is going on well. We will have some announcements over the coming next six months. Nothing to report that we can share with you today. Advanced discussions are on. We'll be able to share some market information either first quarter or second quarter calendar year next. Sir, can you share how much of electrolyzer capacity do we want to set up? Or will you be setting up at least in first phase, if that's possible at all? We will have a total electrolyzer capacity of 5 GW. In the first phase itself. Okay. Correct. Okay. Sure. Thank you so much. Mm-hmm. Thank you. A reminder to our participants, if you wish to ask a question, you may enter star and one. We'll take the next question from the line of Rohit Kothari from GeeCee Investments. Please go ahead. Hi, Robbie, and hi, Vinay. Congratulations on a very robust set of numbers. Robbie with question. If you can highlight a little more on the green hydrogen foray. I understand it's a $70 billion CapEx, which involves setting up the manufacturing of solar and wind equipment, as well as the entire generation of solar and wind power farms, electrolyzer and the downstream capacities in ammonia, urea, methanol and the other industries which can consume hydrogen. If you can give, as an equity investor, what I would be interested in knowing is, over the next five to six years, what would be the total CapEx? What would be the various phases of hydrogen output? When would the downstream output start coming? What would be the gross investment? What would be the equity component of the investment? As a promoter of this large foray, what would be the IRR on investments you would be looking at? That is the first question. The second question is what are the bottlenecks you see or what are the risks you see as you move ahead with this one of the largest CapEx investment in the Indian history. If you can share, you know, whatever numbers broadly, for us to make a calculated guess on the future of this business, that will be helpful. The second question from my side relates to the airport business and part of the EBITDA number has got shared, and I believe it's INR 2,000 crore-INR 2,200 crore EBITDA run rate this year, which we have hit. A very similar question is that with all the work you and your team are doing on the non-aero business, the duty-free business, the parking, the cargo, and the other ancillary service business, and the improvements you all are bringing around just in the existing airports. There are rates, the UDF charges which we read are getting hiked at various airports. What would be the EBITDA trajectory of this business in the next two to three years? Once the Navi Mumbai airport is fully operational, if you can share some light as to the CapEx and the return profile of that, and how do you see this business and the various constituents of revenues within this business panning out over the next three to five years? As a man with a financial hat, how do you see the return profile on your incremental investment? Robbie, I think I've asked quite a lot, and please feel free to take a shot at them in the way you deem fit right. Okay, thank you for the question. I think just starting first with Adani New Industries and Green Hydrogen. We expect, as we had mentioned, in our last year call, there's no major change to the CapEx profile. It remains consistent of $1.2 billion this year, rising to $2 billion-$2.5 billion next year, and so on and so forth, till we complete the full $50 billion in the hydrogen ecosystem. Currently the main focus remains on the input costs. So therefore, the CapEx is going into the manufacture of cell modules, wind turbines, electrolyzers next year, ancillary systems like glass, backsheet, aluminum frames, and the entire ecosystem that sits around the component ecosystem that sits around the manufacturer. We are pretty much on track. We expect this to continue and start our electrolyzer production for green hydrogen. CapEx also will commence next year, and then we start ramping up from there onwards. Pretty much the same sort of to ramp up to $3 billion-$5 billion CapEx from 2025-2026 onwards to hit the mark of about $50 billion by 2033. The main elements within this is that we don't target a specific number in terms of CapEx. We look at risk-adjusted cost. Our first and foremost objective is to produce the hydrogen at lowest cash cost. We are confident that we will produce the hydrogen at one of the lowest cash costs anywhere in the world. From there onwards, we expect that depending on the product CapEx used, that this will be a reasonably high return business, as any energy business is. Although this being green, therefore it has added advantage, which we are not counting into return. We expect the return to be in high teens and even possibly in the low twenties. Third element of your question related to how we see the bottlenecks. In anything that we do, the core thing, the bottleneck remains as to how you integrate this into the existing ecosystem. There, in hydrogen, the biggest impediment is that hydrogen itself does not have the infrastructure to move it around. We are addressing that bottleneck by building appropriate downstream capacities so that we don't have to rely on the hydrogen ecosystem hydrogen infrastructure. That is one bottleneck. The second obviously is the technology aspect of how do you integrate the electrolyzer. There we are working very closely with leading practitioners of the area to ensure that issue is addressed appropriately and build sufficient redundancy in the system, and in our CapEx profile to allow us, say, to overcome that bottleneck if it were to eventuate. We have built sufficient buffer in our CapEx planning to overcome the second aspect of it. Now, moving to the airport business. In the airports business, our core value proposition always is that we look at airport as a regional or community economic business, which means that airport must serve the community it sits in. We are very confident on our what we call the city side or community side developments. They should start bearing fruit from 2025, 2026 and then should become the major part of airport business by 2030, 2031. Our community-based airport businesses will be about 55%-60% of our airport EBITDA. Non-aero businesses will be another 20%-25%, and aero business will only be 10%-15% of our airport business. As you rightly pointed out, we are on track to have just over INR 2,000 crore of EBITDA in this business, and we are likely to continue to see improvements as we go along, as the business recovers from the COVID period. On the main aspect, which is the commercial side of the airport business, we are very confident we are on track and investors will start seeing the results somewhere between 2025 and 2026 as that business starts coming online. The rate of return of this business will comfortably exceed our cost of capital. When I say comfortably, the rate of return is likely to be double of our businesses. We are very, very pleased with the work that the team has been doing. We are confident to deliver one of the best airport investment opportunities that exists in the world. That largely is driven by our own execution capability and operational capability. It also is that we are serving the aspiration of Indian consumer, and we believe that the aspiration of Indian consumer is one of the core strengths that our airport business has. Mr. Kothari, do you have any questions? Any more questions? Yeah, just Robbie, a corporate level question. You know, as you can see, it's a very large CapEx program, of course, backed by solid returns. As wearing a finance hat, do you think you're well covered over the next three to five years with the equity component required to fund these projects? Where do you see you will need partners or you will not need partners? I believe you already have TotalEnergies as a partner, which can aid that. Whether in the airport business or any other business, are you looking for partners or you will continue to fund the equity on your own? No, I think that's a very good question. Because as chairman has announced, and I've always said, whenever we announce something, we announce it within the boundaries of what we can fund. Even within that boundary, we always try to and we always have a basic policy to de-risk the growth of the business. By that I mean that, while we can fund because we always announce things within our envelope, but we always look to have partners because we want to de-risk the growth. In hydrogen, green hydrogen, TotalEnergies is a partner because they bring their engineering capability, they bring their operational excellence, they bring their existing client base knowledge, marketing. It de-risks our hydrogen business. Money is not the issue there. It's the de-risking of the business. Similarly, in data centers we have got EdgeConneX. Airport also, you know, we've been approached by a number of parties, but while we do not need the cash, but if we believe that a particular party can help us in de-risking, we will de-risk. In airports we are also taking, for example, a strategy because we are a community-based asset rather than airport only. For example, we have a JV in duty-free. We have a JV on the fuel side. We will have JV on the element of the community side. And so on and so forth. I think those announcements will continue and the company de-risking will continue of the business. While the CapEx program today looks large, I think it has to be looked in the context of the ability of these businesses to generate cash flow, like airport is already EBITDA positive, so it already making free cash flow. Data centers will start making free cash flows this year. Road business will also start this year. Our incubating businesses are already making EBITDA. It's not as if they require operating cash to go in. Their return will come from equity return will come over next three years, but they are cash flow positive businesses. That we can deploy that cash back into the businesses. That is the core strength of Adani as we look at it, that our investments go into the core of the infrastructure of the country, which is linked to the aspiration of the public, and therefore it has a value derived from the cash flows. In terms of equity program, as you know, over the past three years, as we have outlined, we have executed equity program itself. From time to time, we'll continue that equity program, and that's largely to continue to position the businesses for growth. Planned CapEx we can fund. It is more to support and strengthen the balance sheets for the growth that will come as India grows. We want to exploit that growth of India. Therefore, that is what drives the equity program. Thank you, Robbie. Thank you. Our next question is from the line of Nikhil Abhyankar from DAM Capital. Please go ahead. Hello, sir. Thanks for the opportunity. Congrats. First of all, congrats on a good set of numbers. The first question is, we have just started a 2 GW capacity. We've got an order book of 1.5 GW for it. Is there any timeline for it, for the execution of that order book? I think it's a whilst that itself is a very specific point. Its annual capacity is 2 GW, so for the order book, it will be executed over the next 12 to 18 months. I think more important element is that you see, look at it this as a specific capacity that is being built for the hydrogen business. Ultimately, our manufacturing business is to drive the input cost element of the green electrons for Adani New Industries and for Adani Green. Beyond that, we are less concerned about the market because we will be virtually all of the capacity, with the exception of some, will be required for our own internal requirements. To an extent that market capacity required, we look at it separately. I think in the We should keep the focus on the longer term rather than in the interest we are doing just to continue to use, like, utilize the capacity that we already have while our own Adani New Industries own the production of green energy solar and wind starts in the next two to three years. Understood, sir. Sir, we've got a target capacity of 10 GW of solar modules. Will it entirely be HJT? To start off with, very likely, but the flexibility in the manufacturing arms is that we have to remain, if I understand your question correctly, we have to remain agile to upgrade the manufacturing as and when. Currently we think that between three to five years, the upgrades will be required, and that's how we have built our investment case. Okay, sir. Now, sir, coming to Carmichael Mine. Can you just share us the revenue and EBITDA for Carmichael? Yeah. I think it will be more appropriate. Sorry, Vinay Prakash, you can go ahead, but just I wanted to clarify just one point. Vinay, I don't have number handy with me, Robbie, because I'm outside. I'm meeting with an FP now. Yeah. I'll connect. I think, Vin, if you don't mind, please. Now it is ramped up fully. I think the next quarterly results will be the best time to go through the actual financials of it, and we'll start doing that from next quarter when we start reporting that as an individual line item. Okay. As it completes the full ramp up. I think it will be better that to address that, because currently then it, there's too much ramp up, CapEx. Currently some of the assets are capitalizing. We will complete all of that this quarter, and then we'll be back to discuss it in January. Understood. Sir, one last question. Our net debt has risen by around INR 112,000 crore. Is it mostly because of Carmichael? Yes. That is because of the. Yes. Capitalization that took place in Carmichael Mine. Okay. Okay, great. Thanks a lot. That's all. Thank you. We'll take our next question from the line of Parvez Qazi from Nuvama. Please go ahead. Thanks for taking my question. My first question is on the Navi Mumbai airport. When do we expect that to become operational, and what is the current status of development there? Second, on the MDO business, what is the kind of output guidance that we have, or let's say output target that we have for the FY 2023 and FY 2024? Thanks. Vinay, you want to take the first question on the mine? Both of them will be able to answer that. Second, in relation to 1 MW, it's at technical completion in 2024 and formal operational clearance is shortly thereafter. We're pretty much on track for 2024 completion. Yeah. As far as the NBU business is concerned, we have set a target of, I indicated a few quarters back that, for this financial year, FY 2023, we should be closer to 40 million tons. We should be very close to that. As far as the next financial year concerned, FY 2024, we should be somewhere around 50+. Sure. Thank you, and all the best for the future. Thank you. Our next question is from the line of Apoorva Bahadur from Investec. Please go ahead. Just one clarification. I think you highlighted that the returns from our new energy business will be in high teens or low twenties. Just wanted to check whether it's the equity IRRs or ROC. ROC. Very nice. Thank you so much. That's all from my side. Thank you. The next question is from the line of Prateek Kumar from Jefferies. Please go ahead. Hello. Yeah, good morning. Good morning, sir. My first question is on airport business. For the city side development business, if you talk about and which will be meaningful proportion of EBITDA. What would be the status of land and what state this land is currently? Would there be any use restriction of area under development, given it would be near airport? No. All land is available to us for this business, and it has no restrictions other than normal planning restrictions. No specific restrictions. Anyway, most of your plan is within the restriction itself. This development is going at full pace. This is a vacant land, currently, which you talk about? Yes. All clearly available to us. Nothing to move on. Everything available. Sure. My second question is on hydrogen business. Is there any update on timelines on the national mission document from government on modalities around hydrogen purchase obligations or other things? No, nothing on that timeline. You know, we don't try to see those kind of things. We are grateful for various support that the government provides to the entire sector actually. I think this is a great step by the government and various state government as well. Beyond that, I think we plan our businesses based on commercial outcomes. Sure. We are confident of our business case independent of government targets. Thanks, sir. These are my questions. Thank you. If there are no further questions, we can close the call. Sir, there are no further questions from the participants. Yes. Sure. I would request Mr. Parvez Qazi for closing comments. Over to you, Mr. Qazi. We thank all the participants who are attending this call and also the management of the company for giving us the opportunity to host this call. Robbie, sir, any closing comments from your side? Now. Firstly, our thanks to you for organizing this. Thank you to the investors who asked the questions. Please feel free to drop the questions. Either my comment to investors or to analysts would be if they need to have any further questions, they can reach out to us via you or to Saurabh in our team. On behalf of Adani Group, Adani family and AEL, we thank you for participation and we are grateful for the comments and questions and the wishes conveyed to us by the various investors. Thank you. Ladies and gentlemen, on behalf of Nuvama Research, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.