Adani Group net profit up 107% in first half of FY24 but sales slow down

Capex at Rs 20,000 cr as ports-to-airports conglomerate grows after controversy over Hindenburg Research's report

The net profit of the listed Adani group companies more than doubled year-on-year (Y-o-Y) in the first half of 2023-24 (H1FY24), even as their revenue declined in this period.

The nine firms posted a 107.7 per cent jump in net profit at Rs 23,929 crore in April-September compared to the year-ago period. Net sales, on the other hand, were down 14 per cent to Rs 1.49 trillion in H1FY24, data collated by Business Standard showed. In comparison, the companies that are part of the Sensex clocked an 8.1 per cent growth in net sales and 13.3 per cent in net profit in the first half.

This is the Adani group’s first half-yearly report card since US-based short seller Hindenburg Research accused the Indian conglomerate of stock manipulation and accounting fraud. The Adani group has denied all the allegations.

According to the data, the loan amount of the nine group companies was up 7.7 per cent Y-o-Y to Rs 2.39 trillion in April-September. Cash in hand stood at Rs 43,160 crore in the first half of the year, compared to Rs 33,200 crore reported in the same period of last year, according to a source in the group.

The group’s earnings before interest, taxes, depreciation, and amortisation (Ebitda) for H1FY24 were Rs 44,500 crore and may cross Rs 70,000 crore by the end of the financial year based on the performance of the first half. The group is targeting Rs 90,000 crore in Ebitda in two-three years, said a company official.

Renewables, solar panels, and airports were sectors and companies that drove Ebitda in H1FY24. The group’s capital expenditure (capex) in FY24 will be about Rs 20,000 crore, with the highest allocation made to green hydrogen and airport businesses, according to Adani officials.

Adani Enterprises (AEL), the flagship company of the group, had a gross debt of Rs 42,100 crore as of September 30, up from Rs 38,320 crore six months ago.

The rise in AEL’s gross debt is not a concern for investors as long as it is lower than the growth rate of the company’s operating income, Deven Choksey, chief executive officer of KR Choksey Shares and Securities, told Bloomberg.

AEL incubates the group’s investments, and investors should look at the potential value unlocking going ahead as the group lists its airports business, Choksey said. “Till the time the company’s earnings are under control and doing well, the undue fear around the group should not matter,” he said.

Adani Ports & SEZ added 11 rakes, Loni Inland Container Depot, and warehouses in Mumbai and Indore to its portfolio. The improved utilisation of logistics assets has led to APSEZ recording its highest ever half-yearly rail and wagon volumes. Rail volumes grew at 25 per cent Y-o-Y, and wagon investment schemes’ volumes grew at 42 per cent, said Karan Adani, managing director and CEO of the firm, after his company announced its September-quarter results.