Adani Ports Q3 results preview: Revenue, profit may rise on strong volumes, margins seen contracting

Adani Ports & Special Economic Zone Ltd (Adani Ports) is set to announce its earnings for December 2023 quarter on Thursday, February 1, 2023. Analysts tracking the counter are expecting the Adani Group firm to report a strong set of performance on a year-on-year (YoY) basis. The sequential numbers are expected to be a mixed bag.

A couple of brokerages expect Adani Ports to report a revenue around Rs 7,000 crore, up 45-50 per cent YoY. It sees sequential growth in income in low single digits. Ebitda is pegged at Rs 4,000 crore while Ebitda margins is seen contract ing up to 600 basis points (bps) on a yearly basis. Net profit is expected to jump over 50 per cent YoY around Rs 2,000 crore.

Analysts said the performance from Haifa port in Israel and geopolitical tensions in the Red Sea are key moniterables. The management's guidance on margin expansion may also be tracked by market participants, they said.

Phillip Capital expects Adani Ports to report a  revenue of Rs 6,947.10 crore, up 45 per cent YoY and 4.5 per cent QoQ. Net profit is seen at Rs 2,031 crore, up 54.4 per cent YoY and 16 per cent QoQ. The brokerage pegs Ebitda at Rs 3,934.40 crore, up 31 per cent YoY but flattish sequentially. Ebitda margin is contracting 628 bps YoY to 56.6 per cent in Q3FY24.

Acquisition impact is likely on YoY numbers, with volume growth of 45 per cent YoY and 8 per cent QoQ. Margin will be hurt due to revenue mix, low margin international operations, said Phillip Capital. The brokerage has assumed a forex gain of Rs 120 crore in Q3FY24 and effective tax rate of more than 15 per cent in Q3FY24.

Kotak Institutional Equities is expecting net sales to rise 50 per cent YoY to Rs 7,178.8 crore in Q3FY24, while it sees Ebitda to rise Rs 4,314.5 crore, up 43 per cent YoY and 11 per cent QoQ. Ebitda margins may contract 282 bps to 60.10 per cent while adjusted net profit may surge 63 per cent YoY and 15 per cent QoQ to Rs 2,518.6 crore, it said.

"We see improvement in revenues, driven by a combination of organic volume growth, realization growth and boost from the Haifa Port and logistics business. Underlying comparable volume growth is driven by very strong growth in container volumes and a low YoY base," said Kotak.

Elara Capital is expecting revenue at Rs 7,022.3 crore, up 47 per cent YoY and 6 per cent sequentially. Ebitda may come in at Rs 4,052.3 crore, rising 35 per cent YoY and 4 per cent QoQ, it said. The brokerage pegs the bottom line at Rs 2,162.2 crore, up 31 per cent YoY and 20 per cent QoQ.

"Adani Ports' Q3 volume was up 44 per cent YoY to 108.4 million tonnes. The attacks in the Red Sea might result in delayed vessel arrival but not drag overall volume. For Adani Logistics, we expect revenue growth of 5 per cent YoY on the back of healthy volume, with a margin of 30 per cent," Elara added.

InCred Equities pegs revenue around Rs 7,313.6 crore, up 53 per cent YoY, while Ebitda excluding SEZ to come in at Rs 4,208.4 crore, up 45 per cent YoY, with a Ebitda margins contracting 470 bps to 58.2 per cent. Adjusted PAT for Adani Ports is seen at Rs 2,329 crore, up 50 per cent YoY.
 

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