Adani Ports Q4 preview : High volumes set to boost revenue, EBITDA ; all eyes on Red Sea impact

AHMEDABAD : Adani Ports and Special Economic Zone is likely to report mixed Q4 earnings, with revenue and EBITDA seen rising sharply from the previous year, led by higher volumes, but net profit may fall, according to analysts.

On the NSE, APSEZ shares were trading up 1 percent at Rs 1,330 on April 30, ahead of its fiscal fourth quarter earnings due on May 2.

Based on the consensus of five brokerage analysts, Adani Ports’ Q4 net sales may increase 21 percent on year to Rs 7,046 crore, while net profit may fall 9.3 percent on year to Rs 2,207 crore.

EBITDA for the January-March quarter is expected to surge 33 percent on-year to Rs 4,339 crore. Operating margins are expected to come in at 59-60 percent, improving 400 basis points from a year ago, due to improved revenue mix, said analysts.

In terms of sequential performance, revenue, profit, and EBITDA are forecast to remain relatively unchanged.

Adani Ports handled a total volume of 108.5 million metric tonnes (MMT) in Q4 FY24, likely feeding into a significant increase in revenue. For the full fiscal year 2023-24, Adani Ports achieved a 24 percent volume growth, reaching 420 MMT, surpassing its revised guidance of 400 MMT. It has a target of 500 MMT for FY25.

Analysts said Adani Ports’ sustained growth is driven by new ports and increased volumes, both organically and through acquisitions like the Gopalpur Port in Odisha. The company’s debt position is improving, with a 28 percent YoY increase in revenue.

Going ahead, all attention is on the earnings impact from the Red Sea disruption. So far, there hasn’t been any significant effect. While the Haifa Port volume remains largely unaffected, prolonged disruption could exacerbate container shortages and lower container volume. The management has indicated that the disruption routes account for 10 percent of Adani Ports volumes, with no major volume impact reported as of January.

Adani Ports has delivered strong cash flow from operations (CFO) during FY 2018-23, totaling Rs 43,300 crore at a CAGR of 16 percent. While focusing on optimising acquired assets for consistent cash flows, Adani Ports is estimated to achieve a 13 percent CFO CAGR through FY 2024-26, which would likely be used for capex and debt reduction, according to a Motilal Oswal Securities research note.

Further, operational enhancements at recently acquired ports are anticipated to drive a 10 percent cargo volume growth through FY 2024-26, leading to revenue/ EBITDA/ PAT CAGR of 14 percent/ 15 percent/ 19 percent over the same period, the Motilal Oswal report added.