Adani Enterprises Ltd.’s latest quarterly profit more than doubled, helping billionaire Gautam Adani’s flagship firm refocus attention on the conglomerate’s growth potential after a scathing short seller attack earlier this year wiped out more than $100 billion of market value.
(Bloomberg) — Adani Enterprises Ltd.’s latest quarterly profit more than doubled, helping billionaire Gautam Adani’s flagship firm refocus attention on the conglomerate’s growth potential after a scathing short seller attack earlier this year wiped out more than $100 billion of market value.
The Ahmedabad, Gujarat-based company posted a net income of 7.22 billion rupees ($88.2 million) for the quarter ended March 31, compared to 3.04 billion rupees in the same period last year, it said in an exchange filing Thursday. There weren’t enough brokerages tracking the firm to derive an average profit forecast.
Revenue surged 26% to 313.5 billion rupees, boosted partly by the mining and airport business while total costs climbed 22% to 301.8 billion rupees, the filing said. The company’s shares closed 3.9% higher after the earnings were announced, which showed gross debt shrank by 6.5% to 383.2 billion rupees as of March 31 compared to the year-ago period.
The earnings may bolster Adani Enterprises’ growth and fundraising plans as it seeks to cultivate businesses from airports and data centers to roads and digital services. The incubator of the ports-to-power conglomerate has pared back some of its expansion plans and focused on convincing investors of the strength of its operations after being slammed by a bombshell report from Hindenburg Research at the end of January. Adani Group has denied Hindenburg’s allegations of corporate fraud.
“These exceptional results also highlight our consistent track record of gestating and building critical infrastructure businesses,” Adani said in a post-earnings statement. “Our focus remains on governance, compliance, performance and cashflow generation.”
Integrated Resource Management, which mostly consists of coal trading and contributes the most to overall company revenues, reported a 4.1% rise in sales for the March quarter. Revenue from mining surged almost three-fold to 26.9 billion rupees, while the airports business surged 45% compared to the same period last year, the filing said. The so-called new energy ecosystem saw a 31% jump in revenue.
Compliance Review
The company, which announced a dividend of 1.20 rupees per share, said it reviewed the transactions referred to in the Hindenburg report and an independent assessment by a law firm had confirmed that it was compliant. Adani Enterprises didn’t name the law firm which looked into these transactions.
Here are some other key highlights from the earnings filing:
- Debt equity ratio is 1.01 versus 1.52 last year; debt service coverage ratio has also improved
- Value of current loans fell 72% to 57.3 billion from FY22 while longer term borrowings have climbed
- Finance cost, however, more than doubled to 15.25 billion rupees
- Agreement for three commercial coal mines signed this quarter
- Data Centers: Phase II of Chennai facility is 49% complete; Noida and Hyderabad are at 37% and 30% respectively
Tycoon Adani, who built his fortune on the bedrock of coal trading, has been making wide-ranging efforts to assuage investors and seems to be winning back some backers but not all. He was reappointed chairman for five years by the company board, according to the filing.
The Adani Group’s founders have, since the end of January, prepaid $2.15 billion of founders’ debt, sold stakes in four Adani firms to GQG Partners, scaled back projects and held investor roadshows.
Adani Ports & Special Economic Zone Ltd. announced a bond buyback plan last month to signal that its liquidity position is comfortable. The tycoon’s utility firm, Adani Transmission Ltd., is planning to buy back as much as $100 million of bonds issued by one of its units, Bloomberg reported Thursday.
Adani Enterprises shares plummeted 54.6% in the March quarter but have recovered some ground since. The conglomerate is being probed by India’s markets regulator, which has asked for six more months from the country’s apex court to file its findings on possible violations.
Here’s a snapshot of quarterly earnings of other Adani Group firms that have announced so far:
Source: Company Filings on exchanges
Adani Ports, Adani Transmission and Adani Power Ltd. have not announced their March quarter’s earnings yet.
–With assistance from Dong Lyu.
(Updates with details throughout.)
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