The Adani Group has announced a significant 55% increase in its profit after tax (PAT) for the fiscal year ending March 2024, marking a robust recovery following the adverse impact of the Hindenburg crisis last year. The conglomerate’s net profit surged to ₹30,768 crore, up from ₹19,833 crore in FY23, according to exchange data and analysts. This growth signals a strong return to expansion for the diversified group, which spans industries from energy to transportation.
The Adani Group’s EBITDA Surges to 40%
The group’s EBITDA (earnings before interest, taxes, depreciation, and amortization) also rose significantly by 40% year-on-year to ₹66,244 crore, despite a 6% drop in overall revenue. This increase was driven by a combination of lower imported coal prices, higher volumes, increased merchant contributions, and substantial EBITDA growth in Adani Power, which saw its earnings more than double due to capacity additions.
Jefferies, a global brokerage firm, highlighted the group’s strategic focus on containing debt, reducing founder share pledges, and consolidating its business operations in core sectors as pivotal to this recovery. “Total group EBITDA grew 40% year-on-year in FY24, with a five-year CAGR (compound annual growth rate) of over 27%. The group raised fresh funds from equity, debt, and strategic investors, and promoter increased stakes in group companies while market capitalization rebounded,” Jefferies stated in a note.
The group’s flagship company, Adani Enterprises, experienced a 29% year-on-year EBITDA growth, propelled by the expansion of new incubating businesses in new energy, solar, airports, and IRM trading. Adani Green Energy recorded a 33% EBITDA increase due to a 2.8GW capacity addition and a 100 basis points improvement in capacity utilization factor (CUF).
Other group companies also posted impressive growth. Adani Ports and SEZ reported a 24% rise in EBITDA driven by volume growth, while Adani Total Gas saw a 27% increase, bolstered by a 15% rise in volume and expanded gross margins due to lower gas costs. Ambuja Cement’s EBITDA growth was attributed to a significant increase in unit EBITDA.
Adani Energy Solutions reported a 16% EBITDA growth, largely due to new line additions. Conversely, Adani Wilmar faced challenges with a year-on-year decrease in EBITDA, attributed to inventory losses from falling oil prices and misaligned hedges.
In terms of debt management, the group’s net debt remained stable at ₹2.2 lakh crore in FY24 compared to ₹2.3 lakh crore the previous year. The net debt-to-EBITDA ratio improved significantly to 3.3x from 5x the previous year. Notably, Adani Ports and Adani Power saw reductions in net debt, while Adani Enterprises and Adani Green experienced increased leverage due to new capital expenditure projects.
Adani Group’s ambitious plans include a $90 billion capital expenditure over the next decade, focusing on expanding its core businesses and new ventures. Key projects undertaken in FY24 include Adani Enterprises’ commissioning of a solar module manufacturing ingot wafer unit, wind turbine facility, and copper smelter, as well as Adani Cement’s acquisition of Sanghi Cement.
Adani Ports made significant strides by acquiring Gopalpur port, while Adani Power commissioned a 1.6 GW power plant in Godda. Adani Green added 2.8 GW of renewable energy capacity and launched a solar power project in Khavda, Gujarat. Adani Energy Solutions extended its infrastructure with 1,244 circuit kilometers of transmission lines.
Looking ahead, Jefferies noted, “Adani Enterprises is scaling its captive manufacturing capacity towards green hydrogen production by FY27. The Navi Mumbai Airport is likely to be commissioned by Q4 FY25, and data center projects are scaling up.” Additionally, Adani Cement aims to double its capacity, while Adani Ports targets a 16% CAGR in EBITDA through expansion and ramp-up efforts, aspiring to handle 1 billion tonnes of cargo by 2030.
Adani Total Gas is set to grow new business segments, including an LNG station network for transport and mining sectors and EV charging facilities. Adani Wilmar plans to expand distribution, ramp up alternate channels, and enhance its mix of premium brands.
Jefferies has recommended ‘Buy’ ratings on four Adani Group companies: Adani Enterprises, Adani Ports & SEZ, Adani Energy Solutions, and Ambuja Cements, reflecting confidence in their robust EBITDA growth and strategic initiatives.
The recovery in Adani Group shares, with the conglomerate’s market cap exceeding ₹17 lakh crore, underscores the market’s renewed confidence following the resolution of the Hindenburg report’s impact. The group’s shares showed strong performance on the stock market, with notable gains across its listed entities, led by Adani Total Gas with a 9.4% rise and Adani Enterprises with a 6.9% increase.
