May 31st 2024.
In the last fiscal year that ended in March of 2024, the Adani group experienced a significant surge in profits, reaching an impressive 55%. This comes as no surprise as the conglomerate, known for its diverse range of businesses from apples to airports, is once again on an ambitious expansion journey with plans to invest a whopping $90 billion over the next ten years.
This remarkable growth is even more impressive considering the turmoil the group faced in the previous year due to a scathing report from a US short seller, which caused a decline in the market value of its listed companies. However, the group was able to bounce back by focusing on reducing debt, decreasing founder share pledge, and consolidating its core competencies. As a result, the net profit for the group's listed companies rose to a staggering Rs 30,767 crore, a significant increase from the previous year's Rs 19,833 crore, as reported by exchange data and analysts.
The five-year compound annual growth rate (CAGR) for profit growth was a remarkable 54%. Furthermore, the group's earnings before interest, taxes, depreciation, and amortization (EBITDA) also showed impressive growth, rising by 40% to Rs 66,244 crore, despite a 6% fall in revenue. According to a note by Jefferies, an international financial services company, this was due to the group's successful efforts in raising fresh funds from various sources such as equity, debt, and strategic investors, as well as an increase in promoter stake and a rebound in the group's market capitalization.
The group's leverage was at a multi-year low, as stated by the US-based brokerage. They reported that the net debt at the group level remained stable at Rs 2.2 lakh crore in FY24, compared to Rs 2.3 lakh crore the previous year. This, in turn, led to a significant improvement in the group's net debt/EBITDA ratio, which reduced to 3.3x in FY24 from 5x in the previous year.
While Adani Ports and Adani Power saw a decrease in net debt in FY24, Adani Enterprises and Adani Green experienced an increase due to their new capital expenditure projects. Adani Enterprises successfully commissioned a solar module manufacturing unit, a wind turbine facility, and a copper smelter, while also completing the acquisition of Sanghi Cement. Adani Ports acquired Gopalpur port, Adani Power commissioned a 1.6 GW power plant in Godda, and Adani Green added 2.8 GW of renewable energy capacity. Adani Energy Solutions also achieved significant milestones, including putting up 1,244 circuit kilometers of transmission lines.
Looking towards the future, Jefferies noted that Adani Enterprises is currently focusing on scaling its captive manufacturing capacity to begin producing green hydrogen by FY27. The highly anticipated Navi Mumbai Airport is expected to be operational in the fourth quarter of FY25, and the group's data centre projects are also scaling up. Adani Cement is planning to double its capacity, while Adani Ports has outlined a 5-year business roadmap with the target of achieving 18% CAGR in EBITDA growth between FY24-29. The company is also aiming to handle 1 billion tonnes of cargo volume by 2030.
In addition, Adani Green has raised its 2030 power capacity target from 45 GW to 50 GW, which now includes 5 GW of pumped hydro. Adani Total Gas is also planning to expand its business segments, including the creation of an LNG station network for the transportation and mining sectors, as well as EV charging facilities. Adani Wilmar, the group's commodities firm, is focusing on expanding its distribution, ramping up alternate channels, and improving the mix of premium brands.
Overall, the Adani group has shown remarkable resilience and growth in the face of challenges, and their future plans and projections point towards even more success in the years to come.
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