In its quarterly earnings, Adani Enterprises talked about the company’s financial strength, strong governance and strict regulatory compliance. It partly talked about Hindenburg Research without naming it. The Adani firm gave a brief view on the ongoing market volatility. The Adani group company gave business updates on various segments. Besides, it updated investors about certain investigations and enquiries that were initiated by various agencies against one of its acquired stepdown subsidiary Mumbai International Airport Limited (MIAL).
Moderate leverage, volatility
Adani Group Chairman Gautam Adani said the current market volatility is temporary and that as a classical incubator with a vision of long-term value creation, Adani Enterprises will continue to work with the twin objectives of moderate leverage and looking at strategic opportunities to expand and grow.
Adani said his company’s fundamental strength lies in mega-scale infrastructure project execution capabilities, organisational development and exceptional O&M management skills comparable to the best in the world.
“AEL’s exceptional resilience and capacity to build highly profitable core sector business indicate how our strategy of harnessing the diverse strengths of the Adani portfolio of companies is creating consistent long-term value for all our stakeholders,” he said.
Adani said Adani Enterprises has, over the past three decades, not only validated its standing as India’s most successful infrastructure incubator, but has also demonstrated a track record of building core infrastructure business.
Strong governance
Gautam Adani said his company’s success was due to “strong governance, strict regulatory compliance, sustained performance, and solid cashflow generation. His comments came amid a Reuters report that suggested the group has appointed accountancy firm Grant Thornton for independent audits of some of its companies in a bid to discredit claims by short-seller Hindenburg Research that have battered its stocks and bonds.
Hindenburg Research
Without naming Hindenburg Research, Adani Enterprises in its results’ note said a short seller has issued a report, alleging certain issues against some of the Adani Group entities, which have been refuted by the parent company in its detailed response on January 29.
“Management of the group has assessed that no material financial adjustment arises to the consolidated financial results for the quarter and nine months ended 31st December, 2022 with respect to these allegations,” Adani Enterprises said.
Business updates
Adani Enterprises said Adani Airports handled 20.30 million passengers during the December quarter, up 40 per cent YoY. It said air traffic movements stood at a 1,42,000, up 21 per cent YoY. Cargo volume stood at 1.8 lakh mt.
In the case of Adani Road Transport, five HAM projects across Andhra Pradesh, Telangana, Kerala, Odisha and Madhya Pradesh were completed to the tune of 15-39 per cent.
In the case of AdaniConnex, project completion at 4 data centers at Chennai (41 per cent), Noida (23 per cent), Hyderabad (22 per cent) and Mumbai (9 per cent) stood up to 41 per cent.
Investigations
Adani Enterprises in the results noted updated about the investigations and enquiries that has been initiated by CBI, the Enforcement Directorate and the Ministry of Corporate Affairs against one of its acquired stepdown subsidiary Mumbai International Airport, its holding company GVK Airport Holdings and the erstwhile promoter directors of MIAL for the period prior to June 27, 2020.
MIAL, it said, is co-operating with these agencies to conclude the investigations and related proceedings.
“Subsequent to the quarter ended 31st December, 2022, the CBI has filed a charge sheet during the hearing at jurisdictional magistrate court. However, MIAL or its officials have neither received summons nor the charge sheet filed and the management of MIAL is in the process of obtaining the same. Considering the pendency of these proceedings, the resultant financial or other implications if any, would be known and considered upon receipt of the charge sheet and on MIAL’s evaluation of the charges, facts and circumstances,” it said.
Overall, Adani Enterprises said its net profit stood at Rs 820.06 crore for the September quarter amid strong performance in its key coal trading division and airports business. The company had reported a loss of Rs 12 crore in the same quarter last year. Adani Enterprises reported a 42 per cent YoY jump in the income from operations at Rs 26,951 crore in the December quarter compared with Rs 18,963 crore in the year-ago quarter. Ebitda for the quarter grew 101 per cent YoY to Rs 1,968 crore compared with Rs 977 crore in the same quarter last year.
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