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Adani Enterprises' first-quarter profits fall due to weak coal demand

India's Adani Enterprises reported a decrease in its first-quarter profits on Thursday, as a fall in demand for coal-fired electricity weighed on the company's mainstay coal trading business, sending its share price down by 4%.

The net profit of the company was 7.34 billion rupees ($84 million) for the quarter ending June 30. This is down from 14.55 trillion rupees one year earlier.

The revenue from operations dropped 14%, to 219.61 billion rupies. This was due to a 27% drop in the coal trading unit.

Its largest segment is the coal trading business, which accounts for 36% of total revenue. India continued to be a weakness during the quarter.

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Reduced coal-fired electric demand

India's overall power output also declined amid a milder summer, earlier-than-expected monsoon and slowing economic activity, leading to a decline in coal demand.

Solar manufacturing and wind turbines are part of the new energy business that has been expanded by the conglomerate. During the quarter, however, revenue for the segment dropped by 11%.

The pre-tax profit of the clean energy segment dropped by 34%, to 9.82 billion Rupees. Meanwhile, the coal trading division saw a decline of 45% at 4.85 billion Rupees.

After the results, shares of the company dropped as much as 3,8% to 2436.6 rupees. In the period April-June, they grew by 13%.

(source: Reuters)