Adani Group, a prominent conglomerate with interests ranging from ports to energy, is poised for robust expansion across various sectors.
The company envisions a 20% year-on-year growth in pre-tax profits, targeting an impressive Rs 90,000 crore in EBITDA within the next 2-3 years.
This surge will be driven by significant advancements in airports, cement, renewables, solar panels, transportation and logistics, as well as power and transmission. With the completion of infrastructure investments, Adani Group expects substantial cash generation in the coming years.
Diversified Growth Opportunities:
Adani Group is focused on achieving strong and sustainable growth across its business portfolio. The conglomerate’s listed entities experienced a noteworthy 36% year-on-year increase in EBITDA, reaching Rs 57,219 crore during FY23. Core infrastructure businesses, including energy, transport, logistics, and flagship Adani Enterprise Ltd’s ventures, witnessed a robust 23% growth in EBITDA, amounting to Rs 47,386 crore. Existing businesses under Adani Enterprise Ltd also delivered impressive results, recording a 59% year-on-year growth to Rs 5,466 crore.
Resilient Infrastructure and Asset Base:
Benefiting from a solid asset base established over three decades, Adani Group possesses resilient critical infrastructure, ensuring high asset performance throughout their life cycles. The group operates in utility and infrastructure sectors, which generate assured and consistent cash flows. Furthermore, businesses such as airports and renewables exhibit improved cash flows, bolstering the conglomerate’s overall financial position.
Effective Deleveraging and Financial Discipline:
Adani Group’s significant progress in FY23 was complemented by an effective deleveraging strategy. The combined net debt to EBITDA ratio improved to 3.27 times from 3.8 times in FY22, while the net debt to run-rate EBITDA ratio improved to 2.8 times from 3.2 times in FY23. The group’s management assures that there are no significant debt maturities looming in the near-term, indicating a favourable refinancing position and robust liquidity.
Diverse Funding Sources and Comfortable Debt Position:
Over time, Adani Group has diversified its long-term debt portfolio, reducing its reliance on banks while expanding funding sources. The conglomerate’s current debt is distributed among bonds (39%), global international banks (29%), and public sector and private banks, as well as non-banking financial companies (32%). With its exposure remaining less than 1% of total bank exposures in India, leading Indian banks, including SBI and other public sector units, have expressed confidence in Adani Group’s debt/equity to EBITDA ratio of 3.2%.
Future Outlook and Strategic Partnerships:
Adani Group remains focused on driving growth across diverse sectors such as airports, cement, renewables, solar panels, ports, power, and transmission. The conglomerate’s recent successful loan prepayment programs and strategic partnerships with global investment firms, such as the sale of shares to GQG Partners, highlight investor confidence in the group’s portfolio and businesses. Additionally, Adani Connex, the data centre business, has secured significant project financing from international banks, further strengthening its position in the market.
Adani Group’s rigorous growth plans and positive financial indicators position the conglomerate for a promising future. With a targeted EBITDA of over Rs 90,000 crore by FY23 and the group’s expansion into various sectors and strategic partnerships further reinforce its position.
