Diversified business conglomerate Adani Enterprises on Thursday reported a 42.13% drop in its consolidated net profit to Rs. 320 crore in the second quarter due to stress in its power business.
Total income rose marginally by 1.8% to Rs. 10,265 crore in the July-September period. Similarly, the operating profit rose 8% to Rs. 1,617 crore on the back of higher contributions from the port business and coal trading."Our core businesses of coal trading and ports continue to perform exceedingly well. Power generation business is presently undergoing stress due to high prices of imported coal, shortfall against linkages of domestic coal and limited availability of transmission lines," Adani Group Chairman Gautam Adani said, adding the company is fully committed in resolving these issues.
In the first half, the company saw a 35.56% drop in its consolidated net profit to Rs. 723 crore compared to Rs. 1,122 crore in the same period last fiscal. Total income during this period was up 8% to Rs. 21,300 crore against Rs. 19,681 crore in the year-ago period.
"We expect the overall performance from our businesses to improve substantially as the recent investment in power, port and mining start generating returns and are fully committed in creating sustainable value for all its stakeholders," Chief Financial Officer and Executive Director Devang Desai said.
On the coal trading and mining business, the company said that operations at the Indonesian mines are progressing satisfactorily.
"The operations of its MDO (mine development & operations) business for its Parsa Kente block in Chhattisgarh are expected to commence shortly," it said, adding its Australian coal mining and rail project has achieved several milestones, including major land acquisition and filing of applications of various approvals.
Adani Enterprises also said construction of the ports at Hazira and container terminal in Mundra are completed.
About power generation, the company said it expects to achieve the capacity expansion from the current 4,660 mw to nearly 10,000 mw by March.
Adani ups stake in power biz
Betting big on power business, Adani Enterprises board has approved infusion of additional funds in its subsidiary Adani Power and increase the promoters’ stake to 75% from 68%.
However, the company did not disclose the amount that it would be pumping in for raising the stake.
This would be concluded after necessary formalities by Adani Power and in compliance with applicable SEBI regulations, the company said in a statement.
“We expect power generation business to reap scale and integration benefits and be a large value contributor,” said Gautam Adani, chairman Adani Enterprises.