Adani Ports is expected to report 24-25% on-year growth in net profit for the quarter ended 30 December 2022, when it releases its fiscal third quarter results later this week. Amid the Adani group-Hindenburg Research row, which has wiped off $120 billion or 50% of the combined market capitalisation of Adani group companies, brokerages expect Adani Ports to report around 30% on-year rise in revenue. EBITDA is expected to rise 24-28% on-year, and EBIT margin is likely to come in at 60-63% for the quarter.
According to analysts, subdued container volume is expected. The quarterly numbers would see the impact of lower volume and higher operating companies. Analysts at Philip Capital have assumed an effective tax rate of 17% in the third quarter against 9% in the September quarter. Adani Ports share price has plunged from Rs 760 to Rs 498, down 34% since 24 January 2023 when Hindenburg Research released its report against the Gautam Adani-led conglomerate.
Reduction in EBIT margin to account for higher SEZ-linked income
Adani Ports is scheduled to report its Q3FY23 results on 7 January 2023. Kotak Securities models 13% on-year improvement in comparable revenues, partly boosted by SEZ income. “Underlying comparable volume growth will be low-to-mid-single-digit, impacted by weakness in country-level demand,” it said, adding that consolidation of Gangavaram port volumes from 2QFY23 yields a higher 15% on-year growth in volumes. “Higher on-year realizations and SEZ boost drives a 30% on-year growth in revenues. We model marginal 100 bps on-year reduction in EBITDA margin to account for higher SEZ-linked income,” the brokerage added.
Adani Ports & Special Economic Zone said it handled approximately 27.6 MMT of total cargo in January 2023, recording a growth of 11% on-year. The handled cargo volumes rose 9.96% as against 25.1 MMT of total cargo handled in December 2022. During April 2022- January 2023, APSEZ clocked approximately 280.5 MMT, registering a growth of 8% on-year. The company is engaged in the business of development, operations, and maintenance of port infrastructure (port services and related infrastructure development) and has linked multi-product Special Economic Zone (SEZ) and related infrastructure contiguous to Port at Mundra.
Adani Ports Q3 Results estimates
Kotak Securities
Net Sales: Rs 4,940.4 crore, 30.1% on-year
EBITDA: Rs 3,112.5 crore, 28.1% on-year
EBIT Margin: 63%, -102 bps on-year
PAT: Rs 1,796.9 crore, 24.9% on-year
Philip Capital
Revenues: Rs 4,930.1 crore, 29.8% on-year
EBITDA: Rs 3,022.6 crore; 24.4% on-year
EBIT Margin: 61.3%, -270 bps on-year
PAT: Rs 1,661.9 crore, 12.4% on-year
Adani Ports is the largest port developer and operator in India with six strategically located ports and terminals on the west coast (Mundra, Dahej, Tuna, and Hazira in Gujarat, Mormugao in Goa, and Dighi in Maharashtra) and 6 ports and terminals on the East coast of India (Haldia in West Bengal, Dhamra in Odisha, Gangavaram and Krishnapatnam in Andhra Pradesh, and Kattupalli and Ennore in Tamilnadu), representing 24% of the country’s total port capacity. The company is also developing two transshipment ports at Vizhinjam, Kerala, and Colombo, Sri Lanka. Company’s consolidated net profit surged 65.5% to Rs 1,737.81 crore on 32.8% jump in revenue from operations to Rs 5,210.80 crore in Q2 FY23 over Q2 FY22.