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Issuer Credit Research

Issuer Flash: Adani Renewable Energy (RJ) Limited / ARENRJ

Issuer Flash: Adani Renewable Energy (RJ) Limited / ARENRJ

Report date: 2026-05-22 Event date: 2026-04-24 Event title: AGEL FY2026 Results Readthrough

1. Flash Conclusion

AGEL’s results for the fiscal year ended March 2026 have two implications for ARENRJ / RG II 2039 bonds. First, as evidence for the sponsor AGEL’s operating platform and capital-market access, the results are modestly positive. AGEL reported 19.3GW of operating capacity, power sales revenue of INR 11,602 crore, power sales EBITDA of INR 10,865 crore, a power sales EBITDA margin of 91%, and cash profit of INR 5,399 crore.

Second, the earnings presentation also includes key FY2026 metrics for RG II 570MW. RG II reported power sales revenue of INR 475 crore, total revenue of INR 687 crore, EBITDA of INR 648 crore, total debt of INR 2,566 crore, net debt of INR 1,764 crore, receivables comprising INR 48 crore not yet due and zero overdue receivables, generation of 1,259 million units, and output at 108% of the PPA requirement. Power sales revenue and EBITDA declined slightly year on year, but net debt also declined, overdue receivables were zero, and generation exceeded the PPA requirement. These points do not indicate any sharp deterioration in RG II’s direct credit metrics.

That said, ARENRJ bonds are not senior bonds of AGEL itself. They are secured, scheduled-amortisation project bonds backed by the RG II 570MW solar asset pool. What can be confirmed from the current disclosure is comfort in the sponsor context and high-level RG II metrics. The direct assessment should remain unchanged until the formal RG II compliance certificate, DSCR, DSRA, PPA-level collections, current outstanding balance, and hedge position are reviewed.

2. Disclosed Information

On 24 April 2026, AGEL announced its full-year and fourth-quarter results for the fiscal year ended March 2026. For the full year, energy sales increased 34% year on year to 37,567 million units, power sales revenue rose 22% year on year to INR 11,602 crore, power sales EBITDA rose 23% year on year to INR 10,865 crore, and cash profit rose 11% year on year to INR 5,399 crore. The power sales EBITDA margin was 91%, indicating that the group’s operating platform has not weakened.

The same earnings presentation also provided the following key metrics for RG II 570MW. These are closer to the assets directly backing the ARENRJ bonds and therefore carry greater weight in bond analysis than AGEL’s consolidated metrics.

RG II FY2026 Direct Metrics FY2025 FY2026 Interpretation
Power sales revenue INR 511 crore INR 475 crore Down year on year
Total revenue INR 701 crore INR 687 crore High-level metric including VGF, GST, etc.
EBITDA INR 666 crore INR 648 crore Still high, but down slightly year on year
Total debt INR 2,683 crore INR 2,566 crore Declined due to amortisation
Net debt INR 1,873 crore INR 1,764 crore Declined even after deducting cash and deposits
Receivables - INR 48 crore not yet due; zero overdue Collection delays are limited
Generation 1,299 million units 1,259 million units 108% of PPA requirement
Capacity utilisation factor - 25.2% High for solar assets
Plant availability / grid availability - 99.4% / 99.7% Stable on both operations and transmission

3. Credit Readthrough

For ARENRJ / RG II bonds, the readthrough should prioritise RG II’s direct metrics over AGEL’s parent-level growth. In the current disclosures, power sales revenue and EBITDA declined slightly year on year, but total debt and net debt also declined, overdue receivables were zero, and generation remained at 108% of the PPA requirement. At least based on the disclosed materials, there are no visible signs of a sudden cash-flow deterioration or collection delay at RG II.

At the same time, debt service on ARENRJ bonds depends not on AGEL’s consolidated EBITDA, but on RG II’s PPA revenue, offtaker payments, project accounts, DSRA, hedging, and scheduled amortisation. The RG II compliance certificate as of end-September 2025 showed DSCR of 2.53x, FFO/net debt of 20.2%, and DSRA of INR 1,600mn. For the fiscal year ended March 2026, however, the formal RG II compliance certificate, DSCR, required DSRA amount, restricted accounts, hedge details, and current bond outstanding balance have not yet been confirmed. Therefore, the current results are a positive supporting data point, but not sufficient on their own to upgrade the credit view on the bonds.

4. Points to Monitor Next

The next focus is the formal RG II compliance certificate for the fiscal year ended March 2026 or the next compliance certificate. Since the earnings presentation confirms power sales revenue, EBITDA, debt, receivables, and generation, the next items to verify are DSCR, FFO/net debt, PLCR, actual DSRA balance and required amount, restricted account balances, PPA-level receivables, hedge balances and maturities, the current outstanding balance of the 2039 bonds, and progress on scheduled amortisation.

The latest rating actions by the rating agencies should also be reviewed. AGEL’s official page shows S&P BB+, Fitch BBB-, and Moody’s Ba1 for RG II’s USD Green Bonds, but the latest full reports, outlooks, and rating sensitivities have not been reviewed. It is necessary to check how AGEL’s FY2026 results are reflected in the rating agencies’ views, and whether governance and legal issues related to Adani Group remain continuing constraints.

For market assessment, price, yield, spread, WAL, and comparison with peer Indian renewable-energy restricted-group bonds are required. Rather than drawing a buy conclusion solely from the current results, the appropriate framing is that the sponsor-side picture is somewhat reassuring, while direct debt-service capacity should await the next RG II materials.

5. Sources

Key primary sources used in this Flash:

6. Unconfirmed Items