Adani flagship profit jumps 138% as it moves past Hindenburg

Adani Enterprises Ltd’s latest quarterly profit more than doubled as billionaire Gautam Adani’s flagship firm seems to have recovered from a scathing short seller attack earlier this year that wiped out more than $100 billion off the conglomerate’s market value.

The Ahmedabad, Gujarat-based company posted a net income of Rs7.22 billion ($88.2 million) for the quarter ended March 31, compared to Rs3.04 billion in the same period last year, it said in an exchange filing on Thursday. There weren’t enough brokerages tracking the firm to derive an average profit forecast.

Revenue surged 26 per cent to Rs313.5 billion, while total costs climbed 22 per cent to Rs301.8 billion, the filing said. The company’s shares rose as much as 5.1 per cent after the earnings were announced, which showed gross debt paring to Rs383.2 billion from Rs410 billion last year.

The impressive earnings can bolster Adani Enterprises’ growth and fundraising plans as it oversees a motley mix of businesses from airports, data centers to roads and digital services. This also shows that the incubator of the ports-to-power conglomerate is focused on strengthening its operations after being slammed by a bombshell report from Hindenburg Research at the end of January. Adani Group has denied Hindenburg’s allegations of corporate fraud.

Integrated Resource Management, which mostly consists of coal trading and contributes the most to overall company revenues, reported a 4.1 per cent rise in sales for the March quarter. Revenue from mining surged almost three-fold to Rs26.9 billion, while the airports business surged 45 per cent compared to the same period last year, the filing said. The so-called new energy ecosystem saw a 31 per cent jump in revenue.

Compliance confirmed

The company, which announced a dividend of Rs1.20 per share, said it reviewed the transactions referred to in the Hindenburg report and an independent assessment by a law firm had confirmed that it was in compliance.

Tycoon Adani, who built his fortune on the bedrock of coal trading, has been making wide-ranging efforts to assuage investors and seems to be winning back some backers but not all. He was reappointed chairman for five years by the company board, according to the filing.

The Adani Group’s founders have, since the end of January, prepaid $2.15 billion of founders’ debt, sold stakes in four Adani firms to GQG Partners, scaled back projects and held investor roadshows.

Adani Ports & Special Economic Zone Ltd announced a bond buyback plan last month to signal that its liquidity position is comfortable. The tycoon’s utility firm, Adani Transmission Ltd., is planning to buy back as much as $100 million of bonds issued by one of its units, Bloomberg reported on Thursday.

Adani Enterprises shares plummeted 54.6 per cent in the March quarter but have recovered some ground since.