Adani’s Record-Breaking Year: A Testament to Resilience and Growth
Newzdaddy Business Updates
Adani’s Historic High: Financial Brilliance and Strategic Mastery
The Adani Portfolio has hit an all-time high, showcasing remarkable financial performance for the financial year 2023-24. With a substantial growth of 45% in EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), the company has demonstrated its resilience and strength in the face of economic challenges.
Impressive EBITDA Growth and Core Infrastructure Focus
In the fiscal year 2024, the Adani Portfolio saw its EBITDA soar to INR 82,917 crore, which is approximately USD 10 billion. This impressive growth is primarily driven by the company’s core infrastructure businesses, which account for 84% of the total EBITDA. These businesses, including Adani Power Limited, Adani Green Energy Limited, Adani Total Gas Limited, and Adani Energy Solutions Limited, have provided highly predictable cash flows, ensuring stable financial health.
Cash Profit and Funds Flow from Operations
Adani’s disciplined investment strategy has resulted in significant cash profits. The Funds Flow from Operations (FFO) for FY24 stood at INR 56,828 crore (approximately USD 7 billion), marking a 51% increase year-on-year. This high conversion of EBITDA into cash profit underscores the effectiveness of Adani’s financial strategies.
Expanding Asset Base
Over the past three decades, Adani has built a robust asset base, which now stands at INR 478,137 crore (approximately USD 57 billion), reflecting a 16% increase. These assets serve a vast consumer base of over 350 million users, underscoring the company’s extensive reach and impact.
Strengthened Equity and Cash Reserves
Adani Portfolio’s equity deployed to total assets ratio has reached its highest level ever at 62%, up from 55% in FY23. This demonstrates the company’s strong financial position and prudent capital management. Additionally, the company’s cash reserves have reached an all-time high of INR 59,791 crore (approximately USD 7 billion), representing a 48.5% increase from the previous year. This robust liquidity position provides a solid foundation for future growth.
Reduced Leverage and Improved Credit Ratings
One of the most significant achievements for Adani in FY24 is the reduction in leverage. The company’s Net Debt to EBITDA ratio has decreased from 3.3x at the end of FY23 to 2.2x, marking a multi-year low. This reduction in leverage, coupled with rising cash profits, has significantly strengthened Adani’s balance sheet, providing ample capacity for further growth.
The predictable cash flows have also led to multiple rating upgrades across the portfolio companies. Adani Ports and Special Economic Zone (APSEZ) became the first large-scale Indian infrastructure company to be rated ‘AAA’. Currently, three listed portfolio companies — APSEZ, Ambuja Cement, and ACC — have the highest INR rating of ‘AAA’. Additionally, two entities under Adani Energy Solutions Limited (AESL), Alipurduar Transmission and Western Transmission, have also achieved ‘AAA’ ratings.
Diversified Funding Sources
Adani’s debt profile reflects a well-balanced exposure to various funding sources. Of the total debt mix, 36% comes from domestic banking, 5% from domestic capital markets, 26% from the global banking market, 29% from the global capital market, and the remaining 4% from other sources. This diversified funding approach ensures financial stability and access to capital across different markets.
Breaking Down the Financial Performance
Sector-wise Breakdown of EBITDA Growth
The financial performance for FY24 highlights substantial growth across various sectors:
- Utility Sector: The utility sector, which includes Adani Power Limited, Adani Green Energy Limited, Adani Total Gas Limited, and Adani Energy Solutions Limited, reported an EBITDA of INR 44,446 crore, up 59.64% from FY23. This sector contributes 53.60% to the total EBITDA.
- Transport Sector: Adani Ports and Special Economic Zone Ltd (APSEZ) achieved an EBITDA of INR 17,202 crore, reflecting a growth of 19.18%. This sector accounts for 20.75% of the total EBITDA.
- AEL – Infrastructure Businesses: This segment reported an EBITDA of INR 7,689 crore, marking a 42.09% increase and contributing 9.27% to the total EBITDA.
- Adjacencies (Cement): The cement business, including Ambuja Cement and ACC, saw a remarkable growth of 73.36%, with an EBITDA of INR 7,589 crore, contributing 9.15% to the total EBITDA.
- AEL – Existing Businesses: The existing businesses under Adani Enterprises Limited reported an EBITDA of INR 5,992 crore, up 16.33%, and contributing 7.23% to the total EBITDA.
Overall, the portfolio’s EBITDA for FY24 stood at INR 82,917 crore, a 44.95% increase from FY23, demonstrating strong performance across all sectors.
Key Financial Metrics
- Gross Assets: Total gross assets increased by INR 65,901 crore (USD 8 billion) to INR 478,137 crore (USD 57.4 billion), highlighting the company’s significant asset growth.
- Leverage: The Net Debt to EBITDA ratio reduced from 3.3x to 2.2x, indicating improved financial stability and lower leverage.
- Liquidity: Cash reserves reached INR 59,791 crore (USD 7.2 billion), up 48.5% from last year, accounting for 24.8% of gross debt.
Adani’s Growth Milestones in FY24
Adani New Industries
Adani New Industries has made significant strides by establishing India’s first ingot and wafer manufacturing facility at Mundra, Gujarat. This development marks a major milestone in India’s push towards self-reliance in high-tech manufacturing.
Integrated Terminal 3 at Lucknow Airport
The Integrated Terminal 3 at Chaudhary Charan Singh International Airport in Lucknow, with a capacity to handle 8 million passengers, is another feather in Adani’s cap. This terminal is expected to enhance passenger experience and boost the airport’s capacity significantly.
Mumbai International Airport
At Mumbai International Airport, Adani has introduced electric vehicles and self-baggage systems, underscoring the company’s commitment to sustainability and innovation in airport operations.
Navi Mumbai Airport
The Navi Mumbai Airport project has also seen significant progress, with asphalting work on the runway and other critical developments underway. This airport is poised to become a major aviation hub in the region.
Kutch Copper
Adani’s Kutch Copper project has successfully dispatched its maiden copper production, marking a significant achievement in the company’s foray into the copper manufacturing sector.
Khavda Energy Park
Khavda, the world’s largest energy park in the making, is a testament to Adani’s vision for renewable energy. The park will feature extensive solar installations and India’s largest wind turbine, solidifying Adani’s position as a leader in the renewable energy sector.
The financial year 2023-24 has been a landmark year for the Adani Portfolio. With record-breaking growth in EBITDA, significant cash profits, a robust asset base, and reduced leverage, the company is well-positioned for future growth. The diversified funding sources and improved credit ratings further enhance Adani’s financial stability and access to capital.
Adani’s commitment to transparency and high standards of corporate governance is evident in its detailed financial reporting and strategic investments. The company’s focus on core infrastructure businesses, coupled with its ventures into new industries, positions it for sustained growth and success in the years to come.
Must Read:
Adani Ports Enters Tanzania with Major Concession Deal at Dar es Salaam Port
