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Adani Enterprises Ltd. posted a sharp fall in its quarterly profit, weighed down by the coal trading unit and a foreign exchange loss, marking a tepid show in its first earnings since billionaire-chairman Gautam Adani was indicted in a US bribery probe in November.
Net income at the Adani flagship firm fell 97% to 578.3 million rupees ($6.7 million) for the quarter ended on Dec. 31, compared with the same period a year earlier, according to an exchange filing Thursday. There weren’t enough brokerages tracking the company to derive an average profit forecast.
Shares closed almost 3% lower in Mumbai on Thursday.
Revenue for the firm — known as the group’s incubator overseeing a motley mix of fledgling businesses including airports, roads, data centers and health care — slipped 8.8% to 228.5 billion rupees. Total costs declined 1.1% to 229.2 billion rupees, the filing showed.
The underwhelming earnings signal the headwinds for the company as it undertakes capital spending while Adani and his nephew face allegations by the US prosecutors. The duo have been accused of participating in an over $250 million bribery scheme involving Indian officials for securing green energy contracts and concealing that from the US investors.
Shockwaves
While Adani has denied the five-count indictment, news of the probe sent shockwaves across the ports-to-power conglomerate in November. It led to a stock rout, scrapping of a US dollar bond by the green energy unit and canceling of two proposed infrastructure projects in Kenya.
Revenue at the integrated resource management unit, the company’s biggest topline contributor that’s mainly engaged in coal trading, fell 44% to 89.8 billion rupees.
Adani Enterprises also took a foreign exchange charge of 2.96 billion rupees, joining a growing list of Indian firms pummeled by the steep depreciation of the rupee against the US dollar.
The forex losses are happening in balance sheets across companies and are not indicative of any company-specific issue, according to Deven Choksey, managing director at DRChoksey FinServ.