Adani Ports and Special Economic Zone Ltd.—the most profitable Adani Group company—expects its revenue and operating profits to grow at a slower pace over the next three years. The port developer and operator expects its revenue and earnings before interest, tax, depreciation and amortisation to grow at a compounded annual growth rate of 14 percent over financial year 2019 to 2022, according to an analyst presentation uploaded on the exchanges. That compares with a growth rate of over 20 percent during the last three years.
Lower revenue from SEZ business is likely to dent the company’s growth. It is expecting revenue from SEZ business—through land lease premium, lease of port assets and rental incomes—to be in the range of Rs 800 crore to Rs 1,000 crore in 2018-19 compared to Rs 2,480 crore in 2017-18.
The Adani group company said it expects its free cash flow generation to touch Rs 5,000 crore by financial year 2022 from Rs 1,260 crore in FY18. These positive cash flows will be used by the company for growth opportunities which offer at least 16 percent return, it said. The company also expects to maintain its leverage ratio—net debt-to-Ebitda—within three times despite its aim to spend close to Rs 7,500 crore as capital expenditure over the next three years.
Adani Ports also expects its volume growth rate to continue to outperform industry growth over the next three years. India’s total cargo volume are expected to grow at 5 percent over FY19-22, while that of Adani Ports is expected to grow in the range of 10-12 percent.