In a recent report released by Jefferies, the Adani Group showcased a remarkable 40 percent year-on-year growth in EBITDA during the financial year 2023-2024 (FY24).
This surge comes in the wake of a challenging period for the conglomerate, marked by a downturn in market capitalization triggered by a short-seller report in late FY23.
During FY24, the Adani Group’s EBITDA surged to Rs 660 billion, buoyed by significant achievements across various sectors.
Adani Power particularly witnessed an outstanding performance with its EBITDA more than doubling, attributed to capacity expansion, increased volumes, higher contributions from merchant activities, and favorable trends in imported coal prices.
Adani Group’s Bold Expansion: Unveiling $90 Billion Journey
Jefferies’ report indicates that the Adani Group is now embarking on an ambitious expansion journey, with plans to allocate approximately $90 billion in capital expenditure over the coming decade.
The report states, “Total group EBITDA grew 40 percent YoY in FY24 (with a compound annual growth rate exceeding 27 percent). The Group successfully raised fresh funds from equity, debt, and strategic investors, while the promoters increased their stake in group companies, leading to a rebound in the group’s market capitalization.”
The EBITDA growth trajectory was robust across most group companies, ranging from 16 to 33 percent, except for Adani Wilmar, which experienced a year-on-year decline.
Adani Enterprises witnessed a 29 percent YoY growth in EBITDA, driven by the expansion of new incubating businesses such as Adani New Industries Ltd/solar and airports, alongside IRM trading Business.
Ambuja Cement and Adani Port also reported substantial EBITDA growth, attributed to various operational factors.
Adani Green, with a notable 33 per cent EBITDA growth, underscored its performance through capacity addition and improved capacity utilization factor.
India Ratings and Research (Ind-Ra) further boosted investor confidence by upgrading Adani Green Energy Limited’s long-term issuer rating, citing a stable outlook.
Adani Energy Solutions and Adani Total Gas also demonstrated significant EBITDA growth, propelled by strategic expansions and operational efficiencies.
However, Adani Wilmar faced challenges, witnessing a decline in EBITDA due to inventory losses and hedging misalignment amidst fluctuating oil prices.
The Jefferies analysts highlighted Adani Group’s strategic initiatives, including plans for Green Hydrogen production by FY27 and the commissioning of Navi Mumbai Airport by Q4 of FY25.
Expanding Horizons: Cement & Port Businesses Poised for Growth
Adani Group’s cement and port businesses are poised for substantial growth, with Adani Cement aiming to double its capacity and achieve industry-leading unit EBITDA by FY28.
The Ports has outlined an ambitious 5-year business roadmap, targeting significant EBITDA growth and cargo volume expansion.
Adani Green has revised its 2030 power capacity target upwards to 50 GW, emphasizing its commitment to renewable energy.
Meanwhile, Adani Total Gas plans to diversify into new business segments such as LNG stations and EV charging facilities, while Adani Wilmar focuses on distribution expansion and brand enhancement.
The report underscores the Adani Group’s resilience and strategic vision in navigating challenges and driving sustainable growth across its diverse portfolio.
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