Business Today

A Safe Harbour

Adani ports has grown rapidly through tie-ups, acquisitions and greenfield expansion.
twitter-logo Nevin John        Print Edition: July 19, 2015
Karan Adani, Executive Director, Adani Ports.
Karan Adani, Executive Director, Adani Ports. (Photo: Shailesh Raval)

Fastest-Growing Emerging Companies Rank: 1
Group: SUBSIDIARIES/ JVs
Segment: REVENUE Rs 3,000-6,000 crore

Over the past five years, Adani Ports and Special Economic Zone (APSEZ) has grown from a single-port company to a multi-port operator - spreading its footprint to both the west and east coasts of India. "The strategic locations of our ports and high-tech infrastructure have helped us to capture growth and capitalise on our model of integrated business," says Executive Director Karan Adani, son of Adani Group Chairman Gautam Adani. The rapid expansion reflects on its numbers. In the three years through March 2014, the port behemoth's revenue has grown at a compounded annual rate of 35.65 per cent. In 2014/15, its consolidated revenue jumped by a fourth to Rs 6,151.98 crore and net profit climbed by a third to Rs 2,324.49 crore.

But it has not been a smooth sailing for the company. Karan says the company faced the challenge of shrinking margins as costs rose and the shipping rates remained flat. To tide over the challenge, the company offered additional logistics solutions to customers instead of mere regular port services, thus earning an edge over its competition. The talent shortage was another challenge. "The past four to five years was our growth stage and we were short of competent and qualified manpower. In order to address this deficiency, we have started our own internal talent development training programme and through multifunctional training, we started rotating people's roles to develop them into all-round leaders," he says.

REVENUE:
Rs 4,910.23 crore

NET PROFIT:
Rs 1,900.87 crore

THREE-YEAR CAGR:
35.65%

THREE-YEAR AVERAGE TOPLINE GROWTH:
35.77%

The port operator runs 17 terminals with 38 berths to handle bulk and container cargo. In 2014/15, it handled a record 144 million tonne cargo across all its ports, up 28 per cent. Of this, the Mundra port alone handled 111 million tonne cargo. The company aims to handle 200 million tonne of cargo by 2020.

The company has built ports and related facilities at Mundra, Tuna Tekra, Dahej, Hazira, Mormugoa, Visakhapatnam and Ennore. The Mormugoa port, started in 2013, can handle seven million tonne while Tuna Tekra and Visakhapatnam facilities, both started in 2014, has a capacity of 20 million tonne and 6.5 million tonne, respectively. In addition, it acquired Dhamra port in Odisha from Tata Steel and Larsen & Toubro, and formed an equal joint venture with CMA Terminals to build a new container terminal at Mundra. APSEZ has also emerged as the lone bidder to build the port superstructure and operate Vizhinjam International Multi-Purpose Seaport. The first phase of the project is estimated to cost Rs 7,525 crore. "We have entered into strategic joint ventures with leading shipping lines such as MSC (the worlds second-largest shipping line) and CMA CGM (French container transportation and shipping company) and also have long-term tie-ups with customers like Tata steel, Maruti Suzuki, Tata power and SAIL," says Adani.

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