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Adani looks to expand port presence in Maharashtra, Andhra

FE Bureau

Adani Ports and Special Economic Zones (SEZ) is exploring opportunities to expand its presence in Maharashtra and Andhra Pradesh, group CEO Karan Adani told analysts on Monday. The port and logistics arm of the Adani Group recorded consolidated net profit of Rs. 1,059.20 crore, up 72.4% year-on-year from the same period last year, primarily on account of a one-time deferred tax write-back of Rs. 290.04 crore.

"Andhra Pradesh and Maharashtra are the two places where we do not have any substantial footprint. So we would look at opportunities which would fall under that. We would evaluate them from growth, return and a risk point of view, on how much diversification we can face. But yes, we would look at it proactively," Karan Adani said.

The company has already emerged as a winning bidder for the beleaguered Dighi Port in Maharashtra.

The operating profit of the company for the September quarter stood at Rs. 1791.17 crore, compared with Rs. 1,703.48 crore a year ago. The operating margin, however, fell 182 basis points to 63.5% in September.

The Adani Group's flagship company saw a 15% year-on-year increase in expenses to Rs. 2,440.56 crore in the September quarter compared with Rs. 2,122.77 crore a year ago, while total income for the September grew 13.8% year-on-year to Rs. 3,326.90 crore. Adani said that Mundra Port became the largest port (in volume terms), surpassing Jawaharlal Nehru Port Trust, in the September quarter.

The net debt of the company stood at Rs. 22,483 crore as of September 30, the firm told analysts. The company saw an increase in debt on account of "restatement of forex debt, additional debt on the books on account of business-to-business acquisitions, and $750 million of bond issuance," said Adani Ports CFO Deepak Maheshwari.

He added that the company will continue to access the overseas markets and is exploring newer options to raise longer-term debt. Capital expenditure for the company will be within Rs. 4,000 crore in FY20, Maheshwari said.

Adani Ports and SEZ revised its growth estimate to 8-10% for the current financial year, compared with the earlier estimated growth between 10-12% in FY20, accounting of the economic slowdown.

Adani told analysts that while the corporate tax rate rationalisation helped the liquidity cycle of the medium and small enterprises, it has not yet resulted in a pick-up in new investments or increased interest in SEZs.