Adanis flagship store profits soar 117% on rapid expansion

Adani Enterprises Ltd., the flagship company of billionaire Gautam Adani’s conglomerate, reported a nearly 117 percent rise in quarterly profit, giving it more firepower to increase investment in the many new businesses it has nurtured.

Net income for the quarter ended Sept. 30 was 4.6 billion rupees ($55.5 million), compared with 2.12 billion rupees a year earlier, the Ahmedabad-based company said in a filing on Thursday.

Not enough brokerages issue profit forecasts for companies to come up with an average forecast.

Revenue nearly tripled to Rs 3,818 crore, the filing said, with performance soaring across multiple business units, from integrated resource management to mining and airports, as the company’s efforts to dominate a range of industries began to bear fruit. Total costs surged 182% to Rs 37,770 crore in the latest quarter.

Adani Enterprises, known for incubating new businesses for its later spun-off port power group, has been at the forefront of a frantic expansion spree by Asia’s richest man.

The group has expanded from coal to green energy, cement, airports, data centers and media, spurring a surge in Adani stock. Adani Enterprises has surged more than 3,500% over the past five years.

The company “has once again validated its as India’s most successful new business incubator as it continues to build on exciting ideas,” chairman Adani said in a post-earnings statement.

While some credit watchers have listed the group’s rising debt as a concern, the group has eased those concerns, saying it has been deleveraging.

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The company’s debt-to-equity ratio improved to 0.32 in the September quarter from 0.66 a year earlier, the filing showed. Total debt stood at Rs 4,002 crore as at September 30, down slightly from Rs 4,102 crore at the end of March.

But net external debt — excluding debts to company founders — climbed nearly 18 percent to Rs 33,517 crore over the same period, implying rising debt to external creditors.

Debt service coverage ratio, a marker of a company’s debt service comfort, deteriorated slightly from a year earlier.

Earnings were reported after Indian trading hours on Thursday. The stock rose 1.6% in Mumbai trading on Friday, pushing this year’s gains to 111%.

mixed bag

Other group companies had mixed quarterly earnings.

Earlier in the day, group company Adani Wilmar Ltd. posted a net income of Rs 487.6 crore, down from Rs 1.82 crore a year ago, while Adani Total Gas Ltd. reported a 1.3 percent rise in profit.

Adani Ports & Special Economic Zone Ltd., which has the largest of brokers tracking it among the tycoon’s other firms, beat average profit and revenue forecasts earlier this week.

Power company Adani Transmission Ltd said on Wednesday its profit fell 25% to Rs 206 crore despite a 22% rise in revenue due to soaring costs.

Two other publicly traded conglomerates — Adani Green Energy Ltd. and Adani Power Ltd. — are scheduled to earnings week.

(Apart from the title, this story was unedited by NDTV staff and was posted from a syndicated feed.)

By Rebecca French

Rebecca French writes books about Technology and smartwatches. Her books have received starred reviews in Technology Shout, Publishers Weekly, Library Journal, and Booklist. She is a New York Times and a USA Today Bestseller...