Are Adani Ports & Special Economic Zone Ltd latest results good or bad?

Adani Ports & Special Economic Zone Ltd has reported its latest quarterly results, revealing a complex financial landscape. The company achieved a net sales figure of ₹9,167.46 crores for Q3 FY26, reflecting a year-on-year growth of approximately 29.72%. This marks the seventh consecutive quarter of revenue growth exceeding 20%, indicating the company's strong position in capitalizing on India's expanding trade volumes. However, the profitability metrics present a different narrative. The net profit for the quarter was ₹3,109.05 crores, which represents a year-on-year increase of 27.16% but shows a sequential decline of 6.20% from the previous quarter. This decline raises concerns about the sustainability of profit growth despite robust revenue figures. The operating margin also contracted to 60.54%, down from 61.82% in the same quarter last year, reflecting pressures from rising costs, particularly interest expenses, which surged significantly. The interest expenses for Q3 FY26 reached ₹1,222.88 crores, marking an 85.46% increase year-on-year and a 44.54% increase sequentially. This substantial rise in interest costs is indicative of the company's aggressive expansion strategy and its reliance on debt financing, which is beginning to impact profitability. Despite these challenges, Adani Ports maintains strong capital efficiency, with a return on equity (ROE) of 17.89%. The company also reported robust operating cash flow of ₹17,226 crores in FY25, showcasing its ability to generate cash despite heavy capital investments. In terms of evaluation, the company saw an adjustment in its evaluation, reflecting the mixed performance of revenue growth against the backdrop of rising costs and profitability pressures. Overall, while Adani Ports continues to demonstrate strong revenue growth and operational efficiency, the pressures on profitability and rising interest costs warrant close monitoring moving forward.