Adani shares in focus as Gautam Adani-owned group posts record TTM EBITDA of ₹86,789 crore; sets $100 bn capex target

Adani Group stocks are in focus on Thursday after the company announced a new phase of high capital expenditure (capex) growth, with plans to invest over $100 billion ( ₹8 lakh crore) over the next decade. 

Unlike the previous capex cycle, which relied significantly on debt, this time, the group’s investments will be largely supported by expanding cash flows, reflecting its improved financial health and operational resilience, Adani group said.

Robust Financial Growth Amid Challenges

In the twelve months ending December 2024, Adani Portfolio companies reported an all-time high EBITDA of ₹86,789 crore, marking a 10.1% year-on-year growth. Adjusted for prior period income, the growth rate stands at an impressive 21.3%.

The billionaire Gautam Adani-led group has further seen credit rating upgrades over the last five years. As of December 2024, 75% of its profits come from assets rated ‘AA-’ or higher, a significant jump from less than 50% in FY19. The group’s infrastructure-focused businesses — including utilities, transport, and energy — contribute nearly 85% of its total profits.

Highly stable ‘Core Infrastructure’ portfolio continues to power cashflow generation, with 84% contribution to the total portfolio EBITDA.

This ‘Core Infrastructure’ platform comprises — Adani Enterprises’ incubating Infrastructure businesses, Utility (Adani Green Energy, Adani Power, Adani Energy Solutions, and Adani Total Gas), and Transport (Adani Ports & SEZ) businesses, Adani group said.

As on 30 September 2024, Adani Portfolio had a cash balance of ₹53,024 crore, representing 20.5% of Gross Debt.

Infrastructure Boom

With a 12-month EBITDA exceeding $10 billion, Adani’s capex in FY25 alone is projected to be around 15% of India’s total infrastructure spend as announced in the Union Budget 2024-25.

Most of the capex will be led by Adani Enterprises, the flagship incubator, which oversees assets like airports and green hydrogen. Key contributors include Adani Green Energy, Adani Energy Solutions, and Adani Ports & SEZ. The group expects its major businesses to become global leaders in their respective industries by FY30.

The group’s average finance cost has dropped from 10.3% in FY19 to 8.2%, further enhancing its ability to undertake sustained infrastructure investments. Even a 50 basis point (bps) drop in borrowing costs can significantly reduce the overall cost of long-term infrastructure projects, making Adani’s capital deployment more efficient.

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