Adani Group is one of India’s fastest growing business conglomerates ever since it was established in the year 1988. With diversified business interests in sectors like agriculture, resources, logistics, and energy Adani Group have been able to register a revenue of USD 12 billion in the last year. Headquartered in Ahmedabad, Gujarat, India the conglomerate is owned by the S.B Adani family trust.
Adani Group is the largest producer of thermal power in India and owns the largest integrated infrastructure conglomerate in the region. The group also owns Fortune line of edible oils which is one of India’s popular vegetable oil brands. With the strong commitment to the society and nations, the conglomerate has been contributing to the growth and development of India in various ways.
Strengths in the SWOT analysis of Adani Group
Strengths are defined as what each business does best in its gamut of operations which can give it an upper hand over its competitors. The following are the strengths of Adani Group:
- Strong Vision: The company has been led by a strong vision which is tuned in towards progress and forward-looking. The company envisages sustainable and inclusive progress and is focused towards providing maximum benefits to all stakeholders.
- Core values: The business is deeply rooted in its value system which consists of commitment, trust, and teamwork. The company has around 10,000 employees and they all work as one team in synergy with the vision of the leader.
- Strong leadership: Gautam Adani, the one force behind the meteoric rise of the Adani Group has been a powerful leader and entrepreneur. He was wise in making the right investments and moved ahead without being daunted by failure. He is also quoted as a reference for the quote leading by example.
- Diversified investments: The Adani Group has a presence in diverse core industries such as coal, power, steel, infrastructure, energy, logistics and real estate which covers almost all core sectors making the conglomerate a very strong presence in most areas of industrial development.
- Strong financial records: The Adani Group has been steady in their financial records and has registered an operating margin of 11 .2 % in the year 2017. The equity share capital and debts have been reinvested into assets which have resulted in higher revenues. The ratio of the operating profit to sales is also on an incline indicating that the operational efficiency is growing.
Weaknesses in the SWOT analysis of Adani Group
- Ethical Issues: Though Adani has always been vocal about their commitment towards the society they have been facing an allegation of illegal coal mining for which they are facing charges under the court of law. They have also got into issues like illegal land encroachment in SEZ in Mundra.
- Unhappy shareholders: The Adani Group has not been able to create shareholder satisfaction and this is evident by the fact that the group has lost 14 to 24 percent of their wealth and their debt has increased to around Rs 70,000 crores.
- High-risk appetite: Probably inspired by the sudden growth spurt the top brass of Adani Group made some risky investments in mining in Australia which are not giving the promised returns. In addition to this, some of their investments in infrastructure and real estate are also taking time to monetize.
Opportunities in the SWOT analysis of Adani Group
Opportunities refer to those avenues in the environment that surrounds the business on which it can capitalize to increase its returns. Some of the opportunities include :
- Diversification into renewable energy: There is a lot of impetus given by governments to sustainable and renewable energy sources like wind. Adani Group already has the presence in power and thus they may find it simpler to move to hydroelectric or wind power.
- Growth potential in power sector: Statistics from the government indicate that in accordance with the 12th Five-Year Plan, the power capacity will include an additional 88.5 GW from which, 72.3 GW will be thermal power, 10.8GW hydropower & 5.3 GW nuclear power. This is a huge opportunity for Adani Power.
- Opportunities in infrastructure: The Planning Commission of India has made proposals for expansion in roads and highways, ports, civil aviation and airports, and power infrastructure segments. All this can be the potential target for the Adani Group.
Threats in the SWOT analysis of Adani Group
Threats are those factors in the environment which can be detrimental to the growth of the business. Some of the threats include:
- Foreign investment: Foreign investment inspectors like energy and infrastructure have grown profusely in the last decade. An estimated investment of around US$22 billion has been projected for the next five years in infrastructure. There are also a lot of foreign infrastructure conglomerates moving into India. This can be a potential threat to the company.
- Negative perceptions on the group: In comparison to other Indian conglomerates like the Tatas or the Birlas the Adani Group has come into existence recently and thus do not have the trust or goodwill that the others have. Adding to this are allegations of illegal encroachment and mining scandals.