Adani Enterprises profit rockets on growing airports and green business

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Adani Enterprises, the flagship business incubator owned by Indian tycoon Gautam Adani, posted a more than seven-fold surge in quarterly profit fuelled by accelerated expansion in green energy and airports that offset weaker earnings from coal trading.

The eponymous infrastructure-focused company’s shares closed 1.6 per cent higher on Tuesday after it reported 663 per cent year-on-year growth in net profit to Rs17.4bn ($207mn) for the three months through September.

Its billionaire chair attributed the performance to “rapid growth” in the conglomerate’s airport division, which is India’s largest private operator, as well as at Adani New Industries, its green hydrogen and renewable manufacturing business. The two branches contributed about a third of the company’s profit before interest and tax.

Pre-tax profits at Adani Enterprises’ coal-supplying unit declined 30 per cent amid a similar fall in volumes. Electricity demand in India dipped 2.3 per cent on an annual basis in the quarter, according to S&P Global-owned Indian rating agency Crisil.

Adani’s combination of green energy investment with its coal business mirrors India’s drive to have half its energy come from renewable sources by 2030, while still extensively using the abundant and dirty fossil fuel at its disposal to meet ballooning long-term demand for electricity.

Adani has publicly tethered his nation-spanning infrastructure empire to Prime Minister Narendra Modi’s goal of turning India into a developed country by 2047. On Tuesday, the tycoon said his incubator continued to “focus on investing in logistics, energy transition and adjacent sectors that are core to the economic growth of the country”.

The conglomerate has also been attempting to mount a comeback following damaging allegations of corporate fraud and stock market manipulation levelled against it last year by US short seller Hindenburg Research, which Adani Group has repeatedly denied.

Adani Enterprise, the oldest of the group’s 10 listed entities with diverse business interests from ports to broadcast media, raised about $500mn this month from international and domestic investors, a lower amount than the $2bn approved by its board earlier this year.

The group has revived an international expansion effort, including signing a Tanzanian port deal in May, while Adani has pledged to invest in other Asian nations including Bhutan.

However, some of the international moves have been fiercely opposed in countries including Kenya, where Adani’s proposals have been criticised by unions and legal groups. Kenya’s High Court in September blocked plans for Adani to operate Nairobi’s key airport and this month suspended proposals to revamp the country’s power lines.