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India's largest private port operator Adani Ports and Special Economic Zone on Thursday reported a miniscule 4.2% rise in second-quarter profit as higher expenses and tax curtailed the impact of a jump in cargo volumes.

The company, which is part of billionaire Gautam Adani's conglomerate, said its consolidated net profit rose to 17.48 billion rupees ($209.95 million)in July-September from 16.77 billion rupees a year ago.

Adani Ports' shares were down 2% after the results and have fallen nearly 2% so far this year. The blue-chip Nifty 50 index has risen about 7% in 2023.

The company's revenue from operations rose 28% to 66.46 billion rupees in the September quarter, boosted by a 17% growth in cargo volumes.

However, operating expenses jumped 31%, leading to a 19%-surge in total expenses. A unit of the company also took a one-time tax hit of 4.55 billion rupees.

Adani Ports' volume handling capacity has grown four-fold since 2011, as exports and imports surged in Asia's third largest economy.

The company operates 13 ports and terminals in India, including its largest container handling port, Mundra in Gujarat.

In January, shares of Adani Group companies had slipped after a report by U.S. short-seller Hindenburg Research flagged high debt levels and alleged irregularities at the group.

The port operator has since paid off some of its debt and has also seen investment interest from GQG Partners.

The company's auditor Deloitte resigned in August, amid concerns over certain transactions flagged by Hindenburg.

The Adani Group has denied allegations from Hindenburg.

Shares in Adani Ports have more than doubled from the multi-year lows hit after the Hindenburg report.