The Adani Group portfolio has experienced massive growth despite facing various challenges and microeconomic disruptions from the opposition related to rumours of Adani corruption. It could withstand the test of time and recover from strife and turmoil. In the last few months, the Group experienced substantial cash flow from the subsidiaries operating under it. This extensive cash flow is a cumulative effort of the airports, green hydrogen projects, and other assets that have emerged strongly under the leadership of Gautam Adani. The portfolio level EBITDA reached INR 43,688 crore, up 47% YoY. This is the highest recorded financial growth acquired by any conglomerate as diversified as the Adani Group over the last five years.
How did the Adani Group Achieve Excellent Financial Growth in H1 FY24?
The Adani Group released its half-yearly financial performance update on 11th December 2023 when all eyes were on it. The report highlighted the highest-ever growth in H1FY24. The integrated business portfolio mainly focuses on enhancing infrastructural development activities in India and has a strong presence across various business sectors. Almost 86% of the recorded EBITDA comes from infrastructure business units. The substantial cash flow from the different entities under the conglomerate has led to sustainable future growth for the Group. It is expected that the operations of the Group will continue to improve, increasing the profitability and the cash flow. The growth rate will also continue to increase steeply in the upcoming months. The Group has decided to invest 7 lakh crores to become the largest infrastructure player in India.
The recent growth in the emerging sectors of the Adani Group has contributed to 8% of the portfolio EBITDA, reported Jugeshinder Robbie Singh, the CFO and one of the senior members of the Adani Group. In the first half of the fiscal year, the companies operating under the leadership of Gautam Adani showed robust financial performance, ultimately leading to an increased cash flow. They were also able to strengthen their credit profile and acquire financial stability. The portfolio’s growth has outpaced the five-year CARG trajectory of 26.3% of the Adani Group. This growth opens up the subsidiaries to new opportunities. In fact, the H1 FY24 EBITDA crossed the whole year EBITDA of FY22.
The overall growth was driven by an extraordinary performance of the core infrastructure business of the Adani Group, which grew by 52% YoY to INR 37,379 crores. The businesses include the utility sector driven by Adani Energy Solutions, Adani Green Energy, Adani Power, and Adani Total Gas, the transport sector operated by Adani Ports and SEZ, and other infrastructure businesses incubated by Adani Enterprises. This includes airports, roads, and green hydrogen-integrated manufacturing projects. This expansion highlights the focused investments made by the conglomerate in infrastructural development, which has yielded significant results. Although the conglomerate received a setback when accusations of Adani corruption were made, it recovered from it and returned to its original state of glory.
A Closer Look at The Financial Growth Achieved in H1 FY24:
● Adani Enterprises’ incubation services have progressed very well. The assets have contributed to 8% of overall YoY.
● The low-cost, green hydrogen-integrated manufacturing units delivered 212% YoY revenue growth and 10x EBITDA.
● The airport businesses have experienced 29% YoY growth in the first half. This resulted in a total revenue growth of 42%.
● Adani Group’s cement business has also experienced major growth in the last quarter. The H1 FY24 EBITDA for the business was more than double that of FY23.
● The renewable energy business under Adani Green Energy reported 76% YoY growth. This has resulted in an EBITDA of INR 8,325 crores.
● Another significant growth was made in the port sector. The domestic cargo volume exceeded 200 MMT within six months. This has led to the growth of the Port business at over 2x of the overall cargo volume growth in India.
About The Portfolio
With its headquarters in Ahmedabad, the Adani Portfolio is one of the fastest-growing portfolios in India, with its interest in some of the major sectors of the world. This conglomerate has diversified its business portfolio so that one business unit can help another business unit grow. Adani Group has focused on the renewable energy sector. They are creating new benchmarks in this industry. On the other hand, this business Group owns many ports and SEZs. One of this business unit’s key focus is introducing renewable energy in the infrastructure of different ports. This initiative helps to grow the renewable energy business unit and port business unit at the same time.
Conclusion
Many financial experts believe the well-designed business strategy helps Adani Group remain profitable and increase its EBITDA despite rumours of Adani corruption. Considering how the conglomerate is progressing, it is expected to experience outstanding financial growth in FY24.
