Adani Ports Q3 Results: Profit Rises 15%, Beats Estimates On Higher Cargo Volumes

Adani Ports & Special Economic Zone Ltd.’s quarterly profit rose, beating estimates, as acquisition of the Krishnapatnam port in October last year boosted volumes of India’s largest port operator.

Net profit rose 15% over the preceding year to Rs 1,561.5 crore in the quarter ended December, according to its exchange filing. The consensus of analysts’ estimates tracked by Bloomberg pegged profit at Rs 1,430 crore.

Revenue rose 29% year-on-year to Rs 3,746.5 crore—against the estimated Rs 3,655 crore. Revenue of the ports business rose 35% over a year ago to Rs 3,279 crore. “Growth in port revenue is lower than the cargo volume growth due to the higher cargo handled at JV terminals, which isn’t consolidated,” the company said in the filing.

Cargo volumes grew 21%, 10% and 28% over the preceding year in October, November and December, respectively, according to the filing. The Krishnapatnam port handled cargo amounting to 3 million metric tonnes in November and 3.5 MMT in December, the company said.

Highlights (YoY)

• Operating profit rose 34% to Rs 2,487.9 crore—analysts had projected Rs 2,447 crore. The company reported a forex gain worth Rs 206.2 crore in the third quarter compared with a loss of Rs 145.4 crore in the base quarter.
• Operating margin expanded to 66.4% versus 63.8% a year ago. Analysts expected it to be at 66.94%.

Overall cargo at major ports is down 7% year-on-year in the first 10 months of FY21, Jefferies wrote in a note. “Adani Ports has outperformed at 8% year-on-year growth, driven by the Krishnapatnam Port acquisition and market share gains,” the note said.

According to the company’s shareholding pattern for the quarter ended December, the promoter group held 63.74% stake in the company, out of which 38.8% remains pledged. The company said it will pare promoter pledges to “negligible levels” by September 2021. “The recent Total-Adani Green deal could help promoter pledge reduction,” Jefferies said.

Outlook For FY21

• The company expects volumes to range between 225 MMT and 230 MMT for the ongoing fiscal, excluding those of Krishnapatnam port. It expects volumes at Krishnapatnam to be 20 MMT during the second half of the ongoing fiscal.
• Consolidated revenue is pegged at 12,700 crore for FY21. Port revenue pegged at Rs 10,800 crore while logistics revenue seen to be around Rs 1,000 crore.
• It expects capex of Rs 2,000 crore, including maintenance capex of Rs 500 crore.
• The company has guided for free cash from operations to be around Rs 5,600 crore.

Shares of Adani Ports fell as much as 1.5% during trade on Feb. 9 but recovered later to end little changed at Rs 581.95. The benchmark NSE Nifty 50, too, ended little changed.