- Revenue surged 15% YoY while net profit slipped 2% – a rare earnings profile.
- EBITDA hit a record Rs 2,210 cr, up 20.7% YoY, driven by transmission and smart‑metering wins.
- Transmission pipeline now sits at an eye‑watering Rs 77,787 cr; smart‑meter orderbook totals 2.46 cr units.
- Stock is down 8% over the last month but still up 15% YoY, trading at a P/E of ~45.
- Peers such as Tata Power and Reliance Power are scrambling to match Adani’s pipeline, creating a sector‑wide upside narrative.
You missed the hidden catalyst in Adani Energy’s latest quarter.
Adani Energy Solutions Q3 Profit Snapshot
For the October‑December quarter of FY26, Adani Energy reported a consolidated net profit of Rs 552.31 cr, a modest 2% decline from Rs 561.78 cr a year earlier. The drop was offset by a sequential profit rise of more than 3% versus the prior quarter’s Rs 533.97 cr. Revenue from operations climbed 15% YoY to Rs 6,729.65 cr, while EBITDA surged 20.7% to a record Rs 2,210 cr. Cash profit, a useful proxy for free cash flow, rose 23% YoY to Rs 1,227 cr.
Why Revenue Surge Beats Sector Trend
The Indian power‑infrastructure market has been wrestling with delayed projects and policy uncertainty. Yet Adani’s top‑line outperformance suggests that its execution engine is gaining market share. The 15% revenue lift outpaces the average 8‑10% growth reported by the sector’s index, indicating that the company’s transmission and smart‑metering contracts are not only winning bids but also being delivered on schedule.
How Transmission Pipeline Positions Adani Against Tata Power
Tata Power, the traditional heavyweight, disclosed a transmission backlog of roughly Rs 45,000 cr in its latest filing. Adani’s pipeline, now at Rs 77,787 cr, dwarfs Tata’s by more than 70%. This disparity matters because the transmission segment commands higher margin EBITDs (often 30‑35%) compared with distribution. If Adani can convert its pipeline into revenue on the projected timeline, the company could lift its net margins well above the sector average of 8‑9%.
Smart Metering Boom: A Game Changer for Indian Utilities
Adani’s smart‑meter orderbook stands at 2.46 cr meters, translating to a revenue potential of Rs 29,519 cr. The Indian government’s target of 103 million smart meters by 2027 creates a $10‑plus‑billion market. Competitors like Reliance Power have only scratched the surface with roughly 0.8 cr meters in their pipeline. The scale advantage gives Adani a clear path to capture a larger share of the recurring service‑contract revenues that follow meter installation.
Historical Parallel: 2021 Power‑Sector Rally and What Followed
In FY22, Adani’s predecessor in the transmission space posted a 12% YoY profit increase while its share price rallied over 30% in six months. The catalyst then was a similar surge in pipeline announcements paired with a government push for grid modernization. After the rally, the stock settled into a range of 15‑20% upside from that peak, delivering solid total returns for long‑term holders. The pattern suggests that a current 3% price bump could be the first step of a multi‑quarter appreciation cycle.
Technical Lens: P/E Ratio at 45 – Fair Valuation?
A price‑to‑earnings (P/E) multiple of 45 is high compared with the Indian power‑sector average of 20‑25. However, the multiple must be contextualized. The record EBITDA, robust pipeline, and a cash‑profit growth rate of 23% justify a premium. Moreover, the P/E does not yet embed the future earnings uplift from the Rs 1 lakh cr tendering pipeline that analysts estimate could add 10‑12% to FY27 earnings. If those projects materialize, the effective forward P/E would compress to the mid‑30s, aligning better with sector peers.
Investor Playbook – Bull vs. Bear Cases
Bull Case: The combination of a record EBITDA, an expansive transmission backlog, and a dominant smart‑metering orderbook fuels a revenue growth trajectory of 12‑15% CAGR through FY30. Execution risk is mitigated by the company’s on‑ground track record of commissioning four transmission projects in the current FY. A successful conversion of the pipeline would compress valuation multiples, delivering a potential 30‑40% upside from the current price.
Bear Case: The 2% YoY profit dip raises concerns about cost inflation or pricing pressure. A slowdown in government tendering, or delays in land acquisition for transmission lines, could stall the pipeline. Additionally, a P/E of 45 leaves little room for error; any earnings miss could trigger a sharp correction.
For risk‑adjusted exposure, investors might consider a phased entry: start with a modest position now, add on if the company reports Q4 earnings that confirm pipeline momentum, and protect downside with stop‑loss orders around the recent 8% monthly low.