Adani Group Profit Jumps 55% in 2023-24, Eyes $90 Billion Investment
31.05.2024: The Adani Group reported a remarkable 55% increase in profit for the fiscal year ending March 2024. The conglomerate, with interests ranging from apples to airports, is planning a substantial $90 billion capital expenditure over the next decade.
Emerging from challenges posed by a critical US short seller report, the Adani Group focused on debt management, reducing founder share pledges, and consolidating its core businesses during the fiscal year 2023-24. These strategic moves resulted in a net profit surge to ₹30,767 crore for the group’s listed companies, up from ₹19,833 crore the previous year.
The group’s 5-year compound annual growth rate (CAGR) for profit stood at an impressive 54%. Earnings before interest, taxes, depreciation, and amortization (EBITDA) rose by 40% to ₹66,244 crore, despite a 6% decline in revenue.
Jefferies, a US-based brokerage, noted in a report that the group’s EBITDA growth, fresh funding from equity, debt, and strategic investors, along with an increased promoter stake, have positioned the Adani Group for an expansion spree. The group’s leverage is at a multi-year low, with net debt stabilizing at ₹2.2 lakh crore in FY24 compared to ₹2.3 lakh crore in FY23. The net debt-to-EBITDA ratio improved significantly to 3.3x in FY24 from 5x the previous year.
Adani Ports and Adani Power saw reductions in net debt during FY24. Increased leverage for Adani Enterprises and Adani Green was attributed to new capital expenditure projects.
Key developments in FY24 include:
- Adani Enterprises: Commissioned an ingot wafer unit for solar module manufacturing, a wind turbine facility, and a copper smelter.
- Adani Cement: Completed the acquisition of Sanghi Cement.
- Adani Ports: Acquired Gopalpur port.
- Adani Power: Commissioned a 1.6 GW power plant in Godda.
- Adani Green: Added 2.8 GW of renewable energy capacity and began operations of a solar power project in Khavda, Gujarat.
- Adani Energy Solutions: Established 1,244 circuit kilometers of transmission lines.
Looking ahead, Jefferies highlighted several ambitious projects:
- Adani Enterprises: Scaling up captive manufacturing for green hydrogen production by FY27.
- Navi Mumbai Airport: Expected to be operational by Q4 FY25.
- Data Centers: Expanding capacity.
- Adani Cement: Aiming to double its capacity.
- Adani Ports: Targeting 1 billion tonnes of cargo volume by 2030, with an 18% CAGR in EBITDA from FY24-29.
- Adani Green: Increasing its 2030 power capacity target from 45 GW to 50 GW, including 5 GW of pumped hydro.
- Adani Total Gas: Expanding LNG station networks and EV charging facilities.
- Adani Wilmar: Focusing on distribution expansion and premium brand mix.
Jefferies has recommended a ‘Buy’ rating for Adani Enterprises, Adani Ports & SEZ, Adani Energy Solutions, and Ambuja Cements.