Adani Enterprises, the flagship company of the Adani Group, is hoping recent investments in its businesses help substantially improve performance, after reporting a sharp decline in consolidated net profit as higher fuel costs hit its power generation division.
Adani Enterprises? July-September consolidated net profit plunged 42% year-on-year to R320 crore from R552.6 crore. A foreign exchange gain helped boost profit by R130 crore. Last year, forex losses had shaved off R115 crore from the company?s profit. Consolidated net sales, however, increased by 1.8% to Rs 10,262 crore.
Adani Power, in which Adani Enterprises holds a 68% stake, reported a consolidated net loss of R261 crore versus a profit of R173 crore in the year-ago period. Fuel costs nearly tripled to R1,108.34 crore from R358 crore.
?Our 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,? chairman Gautam Adani said on Thursday.
The board of directors of Adani Enterprises have approved additional investment in Adani Power to increase the company?s stake to 75%.
?We expect the overall performance from our businesses to improve substantially as the recent investment in power, port and mining start generating returns,? Devang Desai, CFO Adani Group and executive director, Adani Enterprises, said.
Net profit of Adani Ports & SEZ, which is 77% owned by Adani Enterprises, surged 57.35% y-o-y to R429.56 crore in the second quarter.
Adani Enterprises share closed marginally down at R221.90 on the BSE on Thursday.
