Adani Enterprises Q1 net doubles on new energy growth

Billionaire Gautam Adani's flagship firm on Thursday reported more than doubling of its net profit in the June quarter as growth in the new energy business outweighed weakness in coal trading.

The consolidated net profit of Adani Enterprises Ltd at ₹1,458 crore in April-June was 116% higher than ₹675 crore earnings in the same period a year back, according to a company statement and stock exchange filing.

Adani New Industries Ltd (ANIL), the new energy business unit of the company, posted a 3.6x jump in earnings before interest, taxes, depreciation and amortisation (EBITDA) to ₹1,642 crore on growth in solar manufacturing and wind turbine businesses.

New energy contributes 38% of the company's total EBITDA, which jumped 48% to ₹4,300 crore in the April-June quarter of the current 2024-25 fiscal year, from ₹2,897 crore a year back.

The airports business also saw a 33% rise in pre-tax earnings at ₹682 crore but the company's mainstay coal trading business revenue fell 34% to ₹15,042 crore business of lower coal volumes and prices.

Airports operated by the group handled 7% more passengers at 22.8 million in the quarter and 17% more cargo at 2.7 lakh tonnes.

Its new energy business, which comprises 15% of net revenue, posted growth on the basis of a jump in volumes and prices of solar modules. Total income rose 13% to ₹26,067 crore.

The company board also approved the demerger of the food FMCG business that primarily comprised trading and supply of edible oil and other allied commodities.

"The emerging core infra businesses comprising ANIL Ecosystem, Airports and Roads are consistently making significant strides in their operational performance. The contribution of these businesses to the overall EBITDA has now increased to 62% in Q1 FY25 (2024-25) compared to 45% in Q1 FY24," a company statement said.

Commenting on the results, Gautam Adani, chairman of Adani Group, said, "Adani Enterprises Ltd (AEL) is further expanding its position as India's leading business incubator and a global model in infrastructure development."

"The substantial growth in our EBITDA, driven by the exceptional performance of the ANIL ecosystem, our airport operations and our road construction business, underscores our commitment to operational excellence and sustainable value creation. The combination of best-in-class management practices, state-of-the-art technologies, high ratings and fully-funded growth strategies, ensures that AEL continues to set new national and international benchmarks," he said.

Solar module sales increased by 125% on a year-on-year basis at 1,379 MW while exports more than doubled.

The company said it successfully operated at full capacity of 4 GW for both cell and module lines.

On wind turbine manufacturing, it said, an application for registration as a manufacturer has been made for 5.2 MW prototype blades while a final type certificate was received for a 3 MW wind turbine generator.

AEL said the construction of a data centre at Noida is 89% complete while the Hyderabad centre is 94% complete.

Road business saw the highest-ever 730 lane-km construction done during this quarter.

"Adani Enterprises as an incubator continues to incubate new businesses and create sustainable and long-term value for its stakeholders. Over the years, we have a track record of successfully incubating businesses across various sectors which are currently leading players in their respective sectors and delivering substantial returns to their shareholders.

"In line with above, the Board of Directors of AEL have approved the demerger of the food FMCG business of AEL to Adani Wilmar Limited along with AEL's strategic investment in Adani Commodities LLP," the statement said.

The food FMCG business has become self-sustained, performing well and poised for further growth under AWL, it said.

"For AEL, this arrangement will not only unlock the value for shareholders but also allow focused strategy for sustainable growth in its incubating businesses," it added.