Adani Enterprises' Record EBITDA Half and the Auditors' "except for"

On 28 October 2026 Adani Enterprises reported its highest-ever half-yearly EBITDA, ₹11,958 crore, up 56%, and said its CARE rating was raised to AA/Stable, "highest rating in its credit history." The same day its auditors signed a consolidated review report that says "except for the possible effects" of one matter at Mumbai International Airport Limited. Their standalone report has no such words. The matter is small beside the airport business; the moat questions are elsewhere.

The idea in one sentence

A modified review conclusion is a boundary marker: it shows which slice of a consolidated number the auditor could not test, and at Adani Enterprises that slice is ₹409.28 crore of one airport subsidiary's works contracts, while the numbers that decide whether the airport and incubator moats are real (income per passenger, depreciation, debt, realisation) were not qualified at all.

The fact that breaks the assumption

The media release [PR] says consolidated EBITDA for the half was ₹11,958 crore against ₹7,688 crore a year earlier. The earnings deck [DK, page 4] adds that "Non-Aero initiatives across airports have reflected growth of 55% Y-o-Y basis."

The consolidated limited review report [RS, page 2] says, in paragraph 6: "except for the possible effects of the matters referred to in paragraph 5 above". Neither the release nor the deck mentions the review conclusion; we searched both for "modified", "qualif", "emphasis", "CBI", "chargesheet" and "MIAL" and found none.

A reader of the release sees a record; a reader of the auditors' report sees a caveat. Both are true, and they describe different parts of the balance sheet.

One concrete thing, followed

Follow one number: ₹409.28 crore.

Paragraph 5 of the consolidated report [RS, page 2] states that, for one subsidiary, Mumbai International Airport Limited (MIAL), "the legal proceedings involving investigations initiated by the Ministry of Corporate Affairs and chargesheet filed by the Central Bureau of Investigation are currently on-going in respect of matters involving potential conflict of interest and alleged misuse of funds". It puts the sum at ₹845.76 crore, "related to works contracts that are currently included in Property, Plant and Equipment at a net book value of Rs. 409.28 crores". Then comes the operative sentence: "The auditors of MIAL have given a modified conclusion in the absence of sufficient appropriate audit evidence in respect of the above."

Note 12(a) [RS, page 11] states that the CBI "filed a chargesheet with the Court in Mumbai against accused including MIAL and the erstwhile Managing Director", alleging diversion of ₹845.76 crore through contracts, and that the investigations concern the period "prior to 27th June, 2020". MIAL's management "has received legal advice that the allegations in the chargesheet are not to be treated as conclusive", and "any resultant financial or other implications would be assessed and considered after legal proceedings are concluded. Hence no adjustments have been carried out to the financial results."

Which statements does this touch? Only the consolidated ones. The standalone report [RS, page 16] says "nothing has come to our attention" and makes no exception. The auditors' security cover certificate [RS, page 24] says it records "an unmodified conclusion" on the standalone review and "modified conclusion" on the consolidated one. MIAL is one of the group's subsidiaries, so it enters only the consolidated statement.

Nor is it new. Paragraph 5 says the March 2026 audit report on the consolidated statements "were also qualified in respect of the above matter", and the review reports for the quarter ended 30 June 2026 and for the quarter and half year ended 30 September 2025 were "also modified". By the filing's own list, this is at least the fourth report in which the same matter has been carved out.

The mechanism

Why does a conclusion stay modified quarter after quarter? Read the two sentences side by side. The auditors lack "sufficient appropriate audit evidence". The note says implications will be assessed "after legal proceedings are concluded". Our reading: the evidence the auditors need is the court's outcome, which neither the company nor the auditors control. It is a standing label on one balance. The "except for" is tied to paragraph 5; for the other matters the auditors flag (reliance on other auditors, the going-concern paragraph on loss-making subsidiaries, and the MIAL annual-fee and Navi Mumbai investigation emphasis-of-matter items), they write that their conclusion "is not modified".

Size it (our arithmetic, all consolidated):

• ₹409.28 crore is 48.4% of the ₹845.76 crore alleged to be diverted.
• It is 0.6% of the Airport segment's assets of ₹68,613.64 crore at 30 September 2026 [RS, page 14], and 0.14% of consolidated total assets of ₹2,94,858.06 crore.
• Airport segment assets less segment liabilities of ₹51,471.76 crore is ₹17,141.88 crore; the ₹409.28 crore is 2.4% of that.

So the carve-out is narrow by value. The allegation is about "potential conflict of interest" on contracts whose cost sits in the asset base of a concession business, and the filing does not say what happens to that asset base if the allegations are upheld. Neither do we.

What it means for the airport moat

The airport moat, on the filings, is a pricing-and-yield story on a fixed passenger base. The release [PR, page 3] shows passengers down: 21.2 million in Q2 FY27 against 22.6 million, a fall of 6%, and 45.4 million in H1 against 46.0 million. Yet Airports' total income rose 20% in the quarter to ₹3,786 crore and 28% in the half to ₹7,549 crore, and Airports EBITDA rose 55% to ₹1,641 crore in Q2 and 52% to ₹3,275 crore in H1 [PR, page 3]. The driver in the deck [DK, page 18] is non-aero: ₹4,371 crore in H1 against ₹2,823 crore (our arithmetic, +55%), which the deck puts at ₹961 per passenger ("Non-Aero IPP INR 961"). That is a D4 Price Discretion fact: income per passenger rising while passengers are flat or falling.

Two things the same pages show that the headline does not:

1. The profit line is negative. The release shows Airports PBT of ₹(290) crore in Q2 FY27 against ₹99 crore, and ₹(484) crore in H1 against ₹303 crore, with a footnote: "Capitalization of Navi Mumbai Airport is reflected in higher depreciation in H1 FY27" [PR, page 3]. EBITDA is up 52% and profit before tax is a loss. The deck's debt page [DK, page 28] puts Airport gross debt at ₹35,009 crore at September 2026 against ₹29,746 crore in March, up ₹5,263 crore (our arithmetic), and says the increase in long-term external debt "is driven by ongoing capex investment in Airports & PVC Project".
2. A second MIAL item sits beside the CBI one. Note 12(b) [RS, page 11] describes a dispute with the Airports Authority of India over annual fees for March 2020 to February 2022. The filing states that an arbitral tribunal declared MIAL exempt from those fees, that the Delhi High Court on 7 March 2025 pronounced a judgement "dismissing the appeal filed by AAI", and that AAI has further challenged that judgement, with the matter pending for hearing. The group auditors say MIAL's auditors added an emphasis of matter saying the proceeding "could have a significant impact on the financial results, if the potential exposure were to materialize" [RS, page 4]. No amount is given in the filings we read. The group auditors say their conclusion is not modified for this one.

Our reading: the airports' intangible-asset moat (D5) is the right to operate under the concession agreements (Note 12(b) refers to MIAL's Operation, Management and Development Agreement with AAI), and the filings show the yield on that base rising. They do not show whether the profit on it survives the debt and depreciation of the new airport. The modified conclusion bears on one old asset base; the PBT loss and the arbitration exposure bear on the earning power. The deck itself says "Full ramp up of Large Infra assets comprising Navi Mumbai Airport and Ganga Expressway on the horizon" [DK, page 4]: the depreciation has arrived, the full ramp, in the company's words, has not.

What it means for the incubator

The deck titles a section "AEL – Largest Listed Incubator" [DK, page 5] and labels ANIL, AdaniConnex (data centres), Adani Airport Holdings and Adani Road Transport as "Incubating Business" [DK, page 3]. Its summary slide [DK, page 4] splits H1 EBITDA three ways:

Of the ₹4,270 crore increase, Core Infra contributed 12% and primary industry 92%, with mining services subtracting (our arithmetic). The deck points to the copper plant (capacity utilisation "increased to 64%") and says IRM and mining results were boosted by "improved price realization due to positive global price movements" [DK, page 4]. Inside Core Infra, Airports EBITDA rose ₹1,118 crore while ANIL Ecosystem EBITDA fell ₹318 crore, from ₹2,384 crore to ₹2,066 crore (our arithmetic from [PR, page 3]).

That second item is the incubator's moat test in miniature. ANIL's module sales rose 35% in Q2 (1,478 MW against 1,093 MW) and the module line reached 10 GW, yet its Q2 EBITDA fell 7% to ₹1,094 crore; the deck's comment on that line [DK, page 26] is "Impacted due to low realization". Our reading: capacity and volume are not a moat if realisation falls with them. The data-centre story has the same shape: the release says a 240 MW hyperscale order took "cumulative tied up capacity to 1.2+ GW" [PR, page 4], while operational capacity is 94.6 MW. Our reading: tied-up capacity is contracted demand, not delivered capacity.

Nothing in the filings says an incubating business's moat has failed. They say Core Infra Platform EBITDA grew 10% in a half in which capacity grew fast [DK, page 4]; the group's grew 56%.

Where this breaks

• The carve-out may be irrelevant. At 0.6% of airport segment assets, the modification is a footnote, and an article that dwells on it would give a legal process more weight than the balance sheet does.
• The carve-out may matter more than the number. The allegation concerns conflict of interest and works contracts at a concession holder. The notes do not say whether any outcome could reach the concession itself. We do not infer that it could.
• Our non-aero reading may overstate the moat. The deck marks the prior-year non-aero mix as "reclassified" [DK, page 19], "Others" income at Airports fell from ₹448 crore to ₹220 crore in H1 [DK, page 18], and aero growth is "Driven by operationalization of NMIA", so the year-on-year base is not like for like. We have one half-year, no airport-by-airport split and no peer figures, so we cannot say whether ₹961 per passenger is high.
• The group result is mixed. Consolidated profit after tax attributable to owners is ₹332 crore for the half against ₹4,189 crore, a fall of 92% as printed in the release [PR, page 3]. The release excludes the ₹2,644.02 crore OFAC settlement recorded in Q1 [RS, Note 6] from "Continuing PBT"; the statement's own consolidated half-year profit after tax, before the owners/minorities split, is a loss of ₹240.55 crore [RS, page 8].

Why it costs the reader something

A reader who treats the modified conclusion as a verdict will overstate a ₹409.28 crore question and miss what drives airport earning power: a PBT loss in the quarter EBITDA rose 55%, and ₹5,263 crore more airport debt in six months (our arithmetic). A reader who treats the record EBITDA as proof of the incubator thesis will miss that 92% of the increase came from primary industry, and that the ANIL Ecosystem, the incubating business with the most capacity news, reported lower EBITDA.

Both mistakes come from reading one document. The review report and the deck describe different layers of the same company, and only the first says what the auditor could not check.

What to watch

1. The next review report. Whether paragraph 5 appears again for the quarter to 31 December 2026.
2. Airports PBT now that Navi Mumbai's depreciation is in the base.
3. Annual-fee exposure. AAI's further challenge in Note 12(b) is pending for hearing; the filings give no amount.
4. ANIL realisation as the 4.3 GW TopCon line contributes a full quarter.

The concrete thing, again

₹409.28 crore is the number the auditors could not test: 0.6% of what the airport segment owns, absent from the press release. What the airport moat depends on is printed on other pages: ₹961 of non-aero income per passenger, EBITDA of ₹3,275 crore, and PBT of ₹(484) crore.

Earlier governance coverage: our note on the SEBI public-shareholding settlement. The company's first-pass moat page predates these filings. MoatSCORE: 5.39 (read live on the Moat Screener on 29 Oct 2026; first-pass, provisional) on the Moat Screener.

Sources

• [RS] Adani Enterprises, Q2 FY27 results, notes and limited review reports (NSE)
• [CL] Adani Enterprises, date clarification (NSE)
• [DK] Adani Enterprises, Q2 FY27 earnings presentation (NSE)
• [PR] Adani Enterprises, revised media release (NSE)
• [AU] Analyst call audio link (NSE)
• [MP] Adani Enterprises Moat Analysis, [SE] SEBI settlement note and [MS] Moat Screener, with How MoatSCORE works

Educational research, not investment advice. Every figure above is drawn from Adani Enterprises' own filings, read from the primary documents on 29 October 2026; derived figures are our arithmetic, labelled as such. Allegations are described only as the filings state them and are not findings. MoatSCORE to be confirmed on the Moat Screener. No buy/sell recommendations, no price targets, no share prices. Moat & Margin is not a SEBI-registered Research Analyst or Investment Adviser.