Adani Ports

The entire Adani group topped the big losers when the BSE closed on Friday. The losing pack was led by Adani Ports, which was despite it posting a good performance for Q2FY14 on YoY though sequentially, it took some beating. It ended the quarter with a consolidated net profit at Rs.342 crore, up 24% (YoY) but QoQ, it was down 20%. The same trend was visible in the net revenue earned too at Rs.1046 crore, up 47% (YoY) and down 28%. The company also had a forex loss of Rs.213 crore in Q2, higher than the loss of Rs.168 crore in Q1.  The HIFy14 performance is better, with net profit coming in at Rs.759 crore, up 37%.

The Company handled 24.62 MMT cargo with 21% growth in Q2FY14 compared to growth of 6% for at all other ports. In case of containers handled 0.56 million TEUs with 33% growth as compared to de-growth by 5% for at all other ports. Though sequentially, earnings are much lower, the cargo handled in Q1 was lower at 23.59 MMT of cargo and 0.47 million TEUs. Thus one can draw the inference that realizations would have dropped quite sharply QoQ for this drop in earnings despite increase in cargo handled. Its interest burden continues to remain high and it was at Rs.199 crore in current Q2 and Rs.382 crore in H1FY14. The Adani Group’s total debt currently is around Rs.81,000 crore. In June 2011, Adani Ports (then Mundra Port and SEZ Ltd), acquired Abbot Point Coal Terminal at Queensland in Australia for nearly $2 billion. There is now news that Adani Abbot Point plans to raise $1.2 billion through multiple debt instruments to refinance the port company’s borrowings. Well, debt continues to remain the big bone of contention for the group and that is what keeps investors away from the stock.