Jefferies bullish on Adanis as Group sees rise in profit, lines up $90 bn capex

Adani Wilmar’s EBITDA fell YoY due to inventory losses (dip in oil prices) and misalignment of hedges.
Gautam Adani-led Adani Group has received an upgrade by Jefferies as the conglomerate’s 10 listed firms saw a 55% rise in profit for the fiscal year ending March 2024.
Gautam Adani-led Adani Group has received an upgrade by Jefferies as the conglomerate’s 10 listed firms saw a 55% rise in profit for the fiscal year ending March 2024.

NEW DELHI: Gautam Adani-led Adani Group has received an upgrade by Jefferies as the conglomerate’s 10 listed firms saw a 55% rise in profit for the fiscal year ending March 2024. The Group, recovering from major setback, caused by Hindenburg Research’s report, is back to an expansion spree and eyeing a $90 billion capex over next decade.

“During FY24, Adani group EBITDA (for listed cos) grew 40% YoY to Rs 66,000 crore, with more than doubling of Adani Power’s EBITDA on capacity addition, higher volumes, merchant contribution and lower imported coal prices. For other group companies, EBITDA growth was in the range of 16-33%, except Adani Wilmar which saw a YoY fall,” said Jefferies report.

As per the report, Adani Enterprises’ 29% YoY EBITDA growth was led by jump in new incubating businesses (ANIL/solar, airports) and IRM trading business. Adani (Ambuja) Cement’s EBITDA scale up was led by uptick in unit EBITDA.

Adani Port’s growth was led by 24% growth in volume; Adani Green: 33% EBITDA growth was driven by 2.8GW capacity addition and 100bps higher CUF; Adani Energy: 16% EBITDA driven by new line addition; Adani Total Gas’ 27% YoY growth was driven by 15% volume growth and gross margin expansion aided by lower gas costs. Adani Wilmar’s EBITDA fell YoY due to inventory losses (dip in oil prices) and misalignment of hedges.

Jefferies said the leverage ratio improved to a multi-year low at group level. Adani’s high debt levels have always been a point of concern. “Net debt at the group level (8 firms + debt related to cement business acquisition) remained stable at Rs 2.2 lakh cr in FY24 vs Rs 2.3 lakh cr. Net debt/EBITDA improved materially to 3.3x FY24 EBITDA vs 5x YoY. ,” said Jefferies.

Related Stories

No stories found.

X
The New Indian Express
www.newindianexpress.com