Robust Financial Performance in H1 FY24

The Adani Group’s listed companies have demonstrated a commendable performance in the first half of the financial year 2023-24, reporting a substantial 48% surge in EBITDA, reaching an impressive Rs 32,000 crore. Sources suggest an optimistic outlook, with expectations to conclude the fiscal year with a group EBITDA surpassing Rs 70,000 crore, building on the success of the previous financial year where the listed portfolio recorded an EBITDA exceeding Rs 57,000 crore.

Key Contributors to EBITDA

Three pivotal companies within the group—Adani Power, Adani Ports and SEZ and Adani Enterprises—contributed significantly, jointly accounting for two-thirds of the total EBITDA. The calculation is based on consolidated figures derived from operating revenue, excluding other income.

Portfolio EBITDA Highlights

The Adani portfolio for Q1 FY2024 reflects a robust growth of 42% YoY, reaching Rs 23,532 crore. Core infrastructure EBITDA witnessed an impressive 34% YoY growth, amounting to Rs 20,233 crore, constituting approximately 86% of the total portfolio. AEL Infrastructure Businesses showed remarkable growth, with EBITDA soaring by 96% YoY to Rs 1,718 crore, contributing around 7% to the portfolio.

Adani Portfolio Q2FY2024 (Rs Crore)*

Derived from available data. Group is yet to disclose Q2FY2024 financials 

Operational Achievements

Adani Power experienced a noteworthy increase of over 49% in EBITDA for its energy portfolio, overcoming challenges such as allegations of misgovernance and market manipulation. The core infrastructure EBITDA saw a notable rise of about 52% from the previous year. The energy portfolio, including Adani Green Energy, reported a gain of over Rs 16,000 crore in EBITDA, contributing significantly to the overall performance.

Future Expansion Plans

Looking forward, the Group is poised for significant expansion in the current fiscal year, with Adani Enterprises planning an expenditure of approximately Rs 3.8 billion, primarily directed towards ports and airports. Despite these ambitious plans, the group has successfully maintained a stable debt level, hovering just above Rs 72 lakh crore, demonstrating prudent financial management.

Strategic Initiatives to Enhance Credit Profile (August 2023)

In a significant financial milestone, the Adani Group, through strategic initiatives, substantially improved its credit profile. Notably, equity deployment rose to 55.77% of total assets, marking a positive shift. The June quarter concluded with a record cash balance of Rs 42,115 crore, bolstering liquidity. Key measures include a robust net debt to EBITDA ratio of 2.81x, falling below 3x for the first time in a decade.

The core infrastructure and utility platform’s substantial contribution, reaching 86% in Q1 FY24, ensures stability and long-term earnings visibility. Diversified finance sourcing, strong maturity cover, and strategic equity programs have further fortified the group’s financial position.

Key Developments of 2023-2024

1. Adani Electricity’s Diwali Milestone:
   Adani Electricity achieved a historic milestone during Diwali by supplying 100% renewable electricity to Mumbai for four hours. This effort powered 3 million households and establishments, benefiting over 12 million Mumbaikars. The company emphasized its commitment to sustainable development and responsible environmental practices.
2. DFC Funding for Colombo West International Terminal:
   The U.S. International Development Finance Corporation (DFC) announced a USD 553 million funding for Colombo West International Terminal Pvt. Ltd. (CWIT), a consortium involving Adani Ports and SEZ Ltd. This strategic investment aligns with Adani Ports’ focus on infrastructure development in emerging markets, further strengthening its global footprint.
3. Joint Venture for Green Energy Products:
   Adani Global Pte Ltd, a subsidiary of Adani Enterprises Ltd, entered a 50:50 joint venture with Kowa Holdings Asia Pte Ltd for the marketing of green ammonia, green hydrogen, and derivatives. The focus is on marketing these products in Japan, Taiwan, and Hawaii, contributing to the growing green energy market.
4. Certification for India’s Largest Wind Turbine Generator:
   Adani Wind, a division of Adani New Industries Limited, received type certification for its 5.2 MW Wind Turbine Generator (WTG), the largest in India. This certification allows Adani Wind to start series production for global markets, showcasing its expertise in renewable energy solutions.
5. Enhanced Liquidity Position:
   The Adani Group strategically improved its liquidity position at the portfolio level, achieving a cash balance of Rs 42,115 crore by the end of the June quarter. This financial strengthening provides a robust foundation for the group’s ambitious projects.
6. Commissioning of Transnational Power Project:
   Adani Group Chairman Gautam Adani met Bangladesh Prime Minister Sheikh Hasina following the full load commencement of power supply from the Group’s Ultra Super-Critical Thermal Power Plant in Godda, India. This marks India’s first commissioned transnational power project, where 100% of the generated power is supplied to another nation.
7. Pledge for Tree Growth:
   The Adani Group pledged to grow 100 million trees by 2030 as part of its commitment to environmental sustainability. This pledge aligns with the “Trillion Trees Platform” of the World Economic Forum, showcasing the group’s dedication to ecological initiatives.

In conclusion, the Adani Group’s robust financial performance in H1 FY24, marked by a significant surge in EBITDA, underscores its resilience and strategic prowess. Key contributors, including Adani Power, Ports and Enterprises, have played a pivotal role. The portfolio’s stellar growth in Q1 FY2024, especially in core infrastructure EBITDA, reflects the group’s strong foundation. Operational achievements, debt reduction, future expansion plans, and strategic financial initiatives, coupled with noteworthy developments in renewable energy and international collaborations, position the Adani Group for sustained growth.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.