Adani Group profit up 55% in FY24; eyes $90 bn investment over next decade

Adani group saw a 55 per cent profit surge in the fiscal year ended March 2024 as the apples-to-airport conglomerate is back on an expansion spree and eyeing a $90 billion capex over the next decade.

Emerging from a damning report of a US short seller, which hit market value of its listed companies, Adani group in 2023-24 (April 2023 to March 2024) fiscal focused on containing debt, reducing founder share pledge and consolidating business in core competencies.

This helped net profit surge to Rs 30,767 crore for the group's listed companies in the fiscal from Rs 19,833 crore a year ago, according to exchange data and analysts.

The 5-year CAGR (compound annual growth rate) for profit growth was 54 per cent.

EBITDA (earnings before interest, taxes, depreciation, and amortization) rose 40 per cent to Rs 66,244 crore despite a 6 per cent fall in the revenue.

"Total group EBITDA grew 40 per cent year-on-year in FY24 (5-year CAGR of over 27 per cent), group raised fresh funds from equity/debt/strategic investors, promoter increased stake in group companies and group Mcap rebounded," Jefferies said in a note. "The group is back on an expansion spree and eyeing $90 billion capex over next decade."

Group leverage was at a multi-year low, the US-based brokerage said.

"Net debt at the group level (8 companies plus debt related to cement business acquisition) remained stable at Rs 2.2 lakh crore in FY24 vs Rs 2.3 lakh crore. Net debt/EBITDA improved materially to 3.3x FY24 EBITDA vs 5x year-on-year," it said.

Adani Ports and Adani Power saw a drop in net debt in FY24. Increase in leverage for Adani Enterprises and Adani Green was on the back of new capex projects undertaken by companies.

In FY24, the group's flagship Adani Enterprises commissioned an ingot wafer unit as part of solar module manufacturing, wind turbine facility and copper smelter. Adani Cement completed the Sanghi Cement acquisition while promoters infused more funds in the company.
 

Adani Ports acquired Gopalpur port, Adani Power commissioned 1.6 GW Godda power plant, Adani Green added 2.8GW renewable energy capacity and commenced operations of solar power project in Khavda, Gujarat, and Adani Energy Solutions put up 1,244 circuit kilometers of transmission lines.

On the way forward, Jeferries said, "Adani Enterprises is amid scaling its captive manufacturing capacity towards starting green hydrogen production by FY27; Navi Mumbai Airport appears likely to commission by 4QFY25; data centre projects are scaling up."

Adani Cement is looking to double capacity, Adani Ports has outlined its 5-year business road map that targets EBITDA growth at 18 per cent CAGR in FY24-29.

"Ports EBITDA is expected to rise at 16 per cent CAGR led by expansion and ramp-up with the company targeting 1 billion tonnes cargo volume by 2030 (15 per cent CAGR)," it said, adding Adani Green has raised its 2030 power capacity target from 45 GW to 50 GW now including 5GW pumped hydro.

Adani Total Gas plans to grow new business segments including LNG station network for transport and mining sector and EV charging facilities. Commodities firm Adani Wilmar is focused on distribution expansion, ramping alternate channels and improving mix of premium brands.

Jefferies recommended 'Buy' on four group companies -- Adani Enterprises, Adani Ports & SEZ, Adani Energy Solutions and Ambuja Cements.