Adani Enterprises Ltd (AEL), the flagship incubator of the Adani Group, announced a mixed set of results for the second quarter of fiscal year 2026. While the company's consolidated net profit surged by a remarkable 84% year-on-year (YoY) to Rs. 3,199 crore, this impressive figure was driven entirely by a one-time exceptional gain. The company's core operational performance faced headwinds, with revenue declining by 6% and operating profits falling significantly.
In a major strategic move, the company's board also approved a plan to raise up to Rs. 25,000 crore through a rights issue, aimed at strengthening its balance sheet and funding its next phase of growth in new-age businesses like green hydrogen and airports.
Table of Contents
- Deconstructing the 84% Profit Surge: A Tale of Two Profits
- Segment Performance: Airports Shine as Coal Business Slumps
- The Rs. 25,000 Crore Rights Issue: Fueling the Next Growth Phase
- The Investor’s Bottom Line: Looking Beyond the Headlines
- Frequently Asked Questions (FAQs)
AEL's Q2 results present a stark contrast between its reported profit and its underlying operational earnings. The massive jump in net profit was due to a Rs. 3,583 crore exceptional gain from the sale of a 13.51% stake in Adani Wilmar (now known as AWL Agri Business). Excluding this item, the company's adjusted profit before tax showed a sharp 66% YoY decline, highlighting the pressure on its core businesses.
Key Financial Highlights for Q2 FY26
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The company's operational profitability took a hit, with EBITDA falling 18.2% and EBITDA margins contracting by 236 basis points to 15.8%. This was primarily due to weakness in its traditional coal trading business.
To understand how the market has priced in Adani Enterprises’ recent performance and one-time profit gain, check the latest Adani Enterprises share price along with valuation ratios and trend charts.
Adani Enterprises operates as a business incubator, and its revenue is derived from a diverse portfolio of established and emerging businesses.
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Integrated Resource Management (IRM) / Coal Trading: This segment, traditionally AEL's largest, faced a significant downturn. Revenue fell by 29% YoY, dragged down by lower coal prices and reduced trading volumes. This was the primary reason for the company's overall decline in revenue and EBITDA.
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Adani Airports Holdings Ltd (AAHL): The airport business was the star performer, continuing its strong growth trajectory. EBITDA for this segment surged by 51% YoY to Rs. 2,157 crore, and it handled 22.6 million passengers during the quarter.
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Other Incubating Businesses: The roads business showed strong execution with construction output more than doubling, while the new energy ecosystem, including green hydrogen, also saw modest growth.
Significantly, the company highlighted that its "emerging core infra businesses" (like airports, roads, and data centers) now contribute 71% of the total EBITDA, signifying a successful strategic shift away from the volatile coal trading business.
In a major development, AEL's board has approved a plan to raise up to Rs. 25,000 crore through a rights issue of partly paid-up equity shares. This fundraising is crucial for:
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Strengthening the company's balance sheet.
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Funding the "next phase of incubation," which includes scaling up businesses like green hydrogen, airports, data centers, and roads.
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Allowing existing shareholders to participate in the company's future growth story.
There’s a valuable video on YouTube by Business Today discussing the company’s Rs 25,000 crore fundraise plan and how strategic projects like the Ganga Expressway are shaping Adani’s growth trajectory.
The Positives
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Strong Performance of Incubated Businesses: The impressive growth of the airports and roads businesses validates AEL's incubation model. These assets now form the core of the company's operating profit.
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Strategic Fundraising: The Rs. 25,000 crore rights issue is a proactive step to secure long-term capital for high-growth sectors, including a partnership with Google for India’s largest AI data centre.
The Concerns
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Weakness in Core Coal Business: The slump in the IRM segment dragged down the overall operational performance and revenue.
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Misleading Headline Profit: The 84% profit jump is not reflective of the core business's health and was entirely due to a one-off stake sale.
Want to see how the renewable energy arm of the Adani Group performed this quarter? Read the detailed analysis of Adani Green Q2 FY26 Results to understand its 25% profit growth and capacity expansion strategy.
1. Why did Adani Enterprises' net profit jump by 84% in Q2?
The profit surge was due to a one-time exceptional gain of Rs. 3,583 crore from the sale of its stake in Adani Wilmar. The company's core operational profit actually declined.
2. How did the company's different business segments perform?
The airport business was the standout performer, with a 51% YoY increase in EBITDA. However, the traditional coal trading business saw a significant slump, which dragged down the overall revenue and operating profit.
3. What is the purpose of the Rs. 25,000 crore rights issue?
The funds will be used to strengthen the company's balance sheet and invest in its next phase of growth, particularly in incubating new businesses like green hydrogen, data centres, and roads.
4. What is the key takeaway for investors from these results?
The results show a company in transition. While the legacy coal business is weak, the new-age infrastructure businesses (airports, roads) are growing strongly and now contribute the majority of the operating profit. The investment thesis is now focused on the growth of these new businesses.
5. How are the new incubated businesses performing?
The "emerging core infra businesses" are performing well, contributing 71% of the total EBITDA in the first half of FY26. This highlights the success of AEL's strategy to shift its focus away from coal trading towards long-term infrastructure assets.