The Adani Group’s financial health is the strongest it’s been in at least five years, especially regarding its ability to manage debt.
Despite facing criticism from short-seller last year and challenges from global events.
Earnings before certain expenses have increased by 60% compared to the same period last year, reaching Rs 19,480 crore by December 31. In the first nine months of FY24, it reached Rs 78,825 crore.
Over the past few years, the Adani Group’s earnings have grown consistently, with a yearly average growth rate of 27%. It’s projected to reach seven times its FY19 levels by FY27.
The group’s debt has decreased, with net debt dropping 3.5% to Rs 1,78,350 crore by September 30. Cash reserves have also improved to Rs 43,952 crore by December 31.
The ratio of net debt to earnings has improved to 2.5X by September 30, 2023, down from 3.8X in FY22.
The group stated that there are no significant risks or immediate needs for cash, and it has already covered upcoming debt payments.
Since facing accusations of fraud from Hindenburg Research in January 2023, the Adani Group has been working to rebuild trust, reducing debt, attracting new investors, and planning its first dollar bond issue.
In January this year, the Supreme Court cleared the Adani Group of wrongdoing, trusting India’s market regulator, SEBI, to handle any investigations into stock manipulation.
Analysts at Cantor Fitzgerald & Co. believe that Adani Enterprises, the flagship company, is crucial for India’s goals and could see a significant increase in value, stating that the risk-reward balance is favorable at current levels.
In March last year, GQG invested nearly $2 billion in four group companies following allegations by Hindenburg Research. The market saw a downturn, but the group’s combined market capitalization has more than doubled since then to ₹16.6 lakh crore.
GQG Partners has become the largest investor in Adani group companies with approximately $9 billion worth of shares, gradually increasing its exposure since its initial acquisition about a year ago.
Holding a 7.73% stake in Adani Power and a 7.1% stake in Adani Green Energy, GQG Partners’ investment in these two companies is now valued at ₹39,000 crore.
GQG Partners also holds 6.5% in Adani Energy Solutions and 3.8% in Adani Ports And SEZ.
Adani Power and Adani Green Energy, with the highest holdings by GQG Partners, have shown the best returns among the group companies over the last six months. Adani Green Energy’s shares have more than doubled, and Adani Power’s stock has rallied by 74%.
According to the latest shareholding data, GQG Investors holdings in seven out of the ten group companies.
GQG have zero or less than 1% investments in NDTV and Adani Wilmar, with GQG having its highest holdings in Adani Power.
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