ADVERTISEMENT

Investing

Adani Flagship’s Profit Jumps 115% on Airports, Mining Units

The Adani Group headquarters in Ahmedabad. (Prashanth Vishwanathan/Bloomberg)

(Bloomberg) -- Adani Enterprises Ltd. posted a 115% jump in quarterly profit, boosted by solid revenues at its airports and mining businesses as billionaire Gautam Adani’s flagship rebounds from a scathing short seller attack last year. 

The Ahmedabad-based firm posted net income of 14.5 billion rupees ($173 million) for the first fiscal quarter through June 30, compared with 6.74 billion rupees a year ago, according to an exchange filing Thursday. 

There weren’t enough brokerages tracking the firm to derive an average profit forecast. Shares closed 1.5% higher in Mumbai after the earnings were announced.

Revenue rose 12.5% to 254.7 billion rupees, while total costs climbed 8.6% to 238.3 billion rupees. Adani Enterprises, which oversees a motley mix of businesses from coal trading to airports to data centers and green hydrogen, announced hiving off its consumer goods division.

The revenue from airports business jumped almost 30% to 21.5 billion rupees while its so-called “new energy ecosystem” more than doubled to 44.6 billion rupees, the company said in the filing.

Sales from mining operations were up 45.4% to 8.6 billion rupees but the revenue from its Integrated Resource Management unit —  it mostly consists of coal trading and contributes the most to the topline — slipped 28% to 107.9 billion rupees. 

Earnings before interest, taxes, depreciation and amortization rose 48% to 43 billion rupees while gross debt climbed 13% to 566.6 billion rupees.

The robust earnings by the incubator of all the group’s new businesses adds to the tailwinds for the ports-to-power conglomerate. It’s already chalking out ambitious growth plans, has announced a $100 billion investment in green energy and has begun tapping equity markets again.

Regaining Ground

Adani’s empire battled a withering short seller attack in early 2023 but has been rapidly regaining lost ground this year. Hindenburg Research’s allegations of wide-ranging corporate fraud in January 2023, which despite denials from the Adani Group had triggered a stock rout and needed months of damage control.

The flagship’s board approved demerger of the food business to Adani Wilmar Ltd., along with Adani Enterprises’s “strategic investment in Adani Commodities LLP,” according to a company statement. 

The food business “has become self-sustained, performing well and poised for further growth under” Adani Wilmar, it said. “This arrangement will not only unlock the value for shareholders but also allow focused strategy for sustainable growth in its incubating businesses.”

Adani Enterprises is planning to launch a share sale this month or the next, IFR reported earlier on Thursday, citing people familiar with the matter. It also plans to revive its first-ever public sale of bonds by raising as much as 6 billion rupees, Bloomberg News reported this week.

It also kickstarted the first unit of a $1.2 billion copper smelter at Mundra — the tycoon’s first foray into metals refining — in March to tap rising demand for the metal amid an infrastructure boom in India. The company is also building a second airport on Mumbai’s outskirts.

Shares of Adani Enterprises slipped 0.6% in the June quarter and have gained almost 13% this year but it hasn’t touched the pre-Hindenburg levels yet like many other group firms.

Here’s a snapshot of how other Adani Group firms have done in the April-June quarter:

(Updates with a chart and a table on group companies performance. A previous version of the story corrected the percentage of revenue rise.)

©2024 Bloomberg L.P.