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Adani Group Achieves 42% Increase in EBITDA in Q1, Reaching INR 23,532 Crore

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In a significant milestone, Gautam Adani’s conglomerate has reported a remarkable 42% year-on-year surge in pre-tax profits. The surge can be attributed to the impressive growth across various sectors within the group, encompassing domains ranging from airports and power to sea ports. This encouraging development was unveiled by the group on Wednesday.

An unprecedented achievement was marked by an all-time high EBITDA of INR 23,532 crore during the April-June quarter. To put this achievement into perspective, this EBITDA value was nearly equivalent to the full-year FY19 EBITDA of INR 24,780 crore, spanning the fiscal year from April 2018 to March 2019, as highlighted in a statement by the Adani group.

The conglomerate’s expansive presence is represented by ten listed companies, including the flagship incubator Adani Enterprises Ltd, the port venture Adani Ports & SEZ Ltd, the renewable energy arm Adani Green Energy Ltd, the power utility sector Adani Power Ltd, the electricity transmission enterprise Adani Energy Solutions, and the city gas domain Adani Total Gas Ltd. A comprehensive assessment of the group’s financial position reveals a net debt of INR 18,689.7 crore, factoring in a substantial cash balance of INR 42,115 crore.

The core infrastructure and utility platform, known for generating consistent and assured cash flows, contributed significantly to the earnings with an EBITDA of INR 20,233 crore, constituting a substantial 86% of the entire portfolio’s EBITDA.

The statement issued by the group emphasizes the resulting stability, along with multi-decadal earnings predictability and visibility, as a consequence of this achievement. Furthermore, the robust profits have bolstered the portfolio’s liquidity position, rendering it remarkably strong.

In light of a challenging start to the year, the Adani Group had undertaken efforts to enhance operational performance as part of a strategic comeback initiative. This shift was necessitated following a critical report by a US-based short-seller, which surfaced in January of that year.

The Hindenburg report, unveiled on January 24, had made allegations of accounting fraud, manipulation of stock prices, and inappropriate utilization of tax havens. This triggered a severe decline in the stock market, wiping off nearly USD 150 billion from the market valuation at its lowest point.

However, the Adani Group staunchly refuted all allegations presented by Hindenburg. The subsequent comeback strategy entailed a comprehensive overhaul, including a reassessment of ambitions, abandonment of certain acquisitions, proactive repayment of debts to address cash flow and borrowing concerns, and a deliberate reduction in the pace of investment in new ventures.

Moreover, the promoters had divested stakes in five out of the ten listed companies to investors such as GQG Partners, facilitating the gradual recovery of the stocks from the losses incurred.

The statement highlights the ongoing success story of incubation under the flagship company, Adani Enterprises. This incubation has notably propelled businesses such as airports, green hydrogen ventures, and others to almost double their profits on a year-on-year basis. These sectors collectively contributed 7% to the overall portfolio’s EBITDA, amounting to INR 1718 crore.

As the statement underscores, the remarkable portfolio performance can be largely attributed to the flourishing renewable power segment under Adani Green, the thriving infrastructure endeavors led by Adani Enterprises, and the successful cement enterprises operated by Adani Cement.

Adani Green reported an EBITDA of INR 2,200 crore, reflecting an impressive 67% increase year-on-year. This upswing was attributed to a substantial 43% augmentation in operational capacity, translating to 8,316 MW.

Likewise, the cement business displayed a robust operating performance due to streamlined cost structures and improved synergies. This transformation was manifest in the rise of EBITDA per tonne, increasing from INR 888 in the June 2022 quarter to INR 1253 in the same quarter of 2023. Consequently, the EBITDA for the cement business observed a substantial 54% year-on-year growth, reaching INR 1,935 crore.

However, the existing businesses under Adani Enterprises Ltd witnessed a 12% decline in EBITDA. This was primarily attributed to the correction in coal prices and the subsequent stabilization of volumes. Similarly, the FMCG business experienced a notable 64% drop, primarily due to high-cost inventory.

Within the scope of Adani Enterprises Ltd, the airport business witnessed a commendable 27% surge in passenger numbers, amounting to 21.3 million passengers. The road business expanded its network by an additional 79.8 lane km, while the volume of solar module installations escalated by an impressive 87%, reaching 614 MW. Additionally, a fully operational 17 MW data center in Chennai was reported.

Adani Energy Solutions, previously known as Adani Transmissions Ltd, achieved an extension of the electricity transmission network to 19,788 circuit km, following the addition of 550 circuit km. Adani Gas contributed to the growth by adding seven CNG stations, increasing the total count to 467. Moreover, 141 EV charging points were successfully installed, and approximately 700,000 households are now receiving piped cooking gas services from the company.

During this period, Adani Ports and SEZ recorded an all-time quarterly high cargo volume of 101.4 million tonnes. In tandem, Adani Power commissioned an additional 1,600 MW at the Godda ultra-supercritical power plant.

Adani Wilmar, the FMCG subsidiary of the conglomerate, achieved a significant milestone by exceeding 1.49 million tonnes in volumes during the quarter, representing a remarkable 25% year-on-year growth. The cement business, which recently incorporated Ambuja Cement and ACC, observed a notable 9% increase in sales volumes, reaching 15.4 million tonnes.

In conclusion, the Adani Group’s remarkable Q1 performance stands as a testament to its unwavering commitment to growth and operational excellence across a diverse range of sectors. Despite challenges, the group’s strategic adjustments and resilience have led to an impressive financial outcome, setting the stage for continued success in the future.

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