Fitch affirms Adani Ports at BBB-; maintains negative outlook

Fitch Ratings has affirmed Adani Ports and Special Economic Zones (APSEZ) long-term foreign-currency issuer default rating (IDR) at BBB-.

June 07, 2022 1:45 IST | capital market
The outlook is negative, the credit rating agency stated. Fitch Ratings said that APSEZs underlying credit profile reflects its status as Indias largest commercial port operator, with best-in-class operational efficiency. The issuer has shown throughput resilience throughout economic cycles, including the current Covid-19 pandemic-related downturn. Cargo throughput rose by nearly 14% in the financial year ended March 2022 (FY22), or by 6.5% excluding additional contribution from Krishnapatnam Port Company (KPCL) in FY22. This compares with an increase of nearly 6% for cargo throughput at all Indian ports. About half of APSEZs cargo is sticky; this includes contractual take-or-pay cargo, cargo that is unlikely to be diverted to other ports due to infrastructure restrictions, such as the lack of facilities to handle crude oil, and cargo from joint-venture partners. APSEZ has timing flexibility in its expansion projects. Management has budgeted capex of about Rs 86 billion for FY23, but this could be restricted to maintenance capex of Rs 9 billion only. The rating agency believes that APSEZ has adequate liquidity to weather near-term challenges. The company had a readily available cash balance of about Rs 91 billion at FYE22, against operating expenses of Rs 46 billion and interest costs of about Rs 26 billion. APSEZ has Rs 7 billion to repay or refinance in FY22. The company, as a member of one of Indias largest conglomerates spanning various sectors, has strong banking relationships and established access to capital markets, Fitch Ratings added. Adani Ports and Special Economic Zone is Indias leading private operator, having multiple ports across India. Its most important port, Mundra Port, contributed nearly half of the groups throughput and serves as the gateway to landlocked north-western India. The company reported a 21.8% fall in consolidated net profit to Rs 1033.02 crore in Q4 FY22 from Rs 1320.69 crore recorded in Q4 FY21. Net sales rose 6.6% YoY to Rs 3,845.03 crore for the quarter ended 31 March 2022. The scrip fell 1.21% to currently trade at Rs 732 on the BSE. Powered by Capital Market - Live News

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