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Adani Enterprises Ltd. (AEL) Corporación Adani Group is the flagship company engaged in coal and iron ore and with headquarters in Ahmedabad, India. It is a publicly listed holding company, that participates in a broad range of businesses, primarily in mining and trading of coal and iron ore. Through its various subsidiaries, AEL’s subsidiaries provide/engage in:
Power coal and coal trading
Airport management
Solar PV manufacturing
IT centers
Road, rail and water construction
Processing of food and edible oils
Exploration of aerospace, defense, and hydrocarbons.
It is worth mentioning that the portfolio is somewhat restricted, but it is well diversified which reflects significant contributions towards infrastructure and industrial development in India.
Adani Enterprises Ltd was trading 2,835.55 Indian rupees which has some growth of 0.42 % at the end of the market session on the 23rd of October 2024. The company currently has a market cap of INR 3.273 Trillion, price to earnings ratio 83.94, earnings per share 33.78. Earnings reports’ dates are preliminary set to be issued during the period from October 31 to November 04 in 2024.
These figures evidently show AEL is a recognizable market player with relevant profits despite adverse changes due to the excessive market volatility.
Adani Enterprises Ltd reported exceptional results for Q125, achieving a record consolidated EBITDA of INR 4,300 crores, a 48% growth. Key financial highlights include:
Consolidated Profit Before Tax (PBT): INR 2,236 crores, saw a 107% increase.
Consolidated revenue: Consolidated revenue: 26,067 crores which represents growth of 13%.
Incubating Business: 2,667 crores in EBITDA, 62% of of total overall EBITDA enhanced by total incomes of over 63%
Green Hydrogen Ecosystem: Previously 4,519 crores and EBITDA multiplies to 1,642 crores at 138% and 3.6 times respectively.
Airport Business: At a revenue of 2,177 crores, this was also a 27% surge in earnings with EBITDA increasing by 33% to 682 crores.
Mining Services: There was a 41% growth in revenue to 856 crores and there was a 43% increase in EBITDA to 347 crores.
IRM Segment: Revenue of INR 11,201 crores, yielding an EBITDA margin of 990 crores.
Carmichael Mines: 3.2 million metric tons more of production for a total of 21% and 2.8 million metrics tons more shipments for a turnaround percent growth of 16%.
Net Debt: From March it went up from 32,000 crores to 36,000 crores within a span of 4 months in June.
Production Stabilization: Ingot and wafer production is still being ramped up and should reach full capacity by the end of the next quarter.
Mining Projects: There are a few commercial mining projects that are still in the pipeline and cannot be produced in the near future.
Airport Revenue: We have yet to receive a detailed distribution of both aero and non-aero airport operations revenue.
Coal-to-PVC Project: This project is currently being developed and is expected to be fully operational in FY26.
Adani Enterprises has embarked on a project to raise $500 million by selling shares for project financing and loan repayments according to two sources close to the matter. This begins the company’s efforts in raising equity capital after the deal of $2.5 billion to sell shares was cancelled in February 2023 due to a shortseller report accusing the company of misuse of offshore tax shelters and stock rigging, allegations that Adani has always argued about.
In the month of May, Adani Enterprises approved seeking not more than $2 billion, out of which part is through qualified institutional placement targeting a significant institutional buyer. The price for new shares is set at INR 3,117.475 per share. There is also a greenshoe option with the company which as well allows seeking more funds based on investor appetite.
Money raised from the sale of shares will be utilized for green energy initiatives, building poly vinyl chloride (PVC) plants and cutting the debt of its Airport operations. More interestingly, this is after Adani’s power transmission unit raised $1 billion in July with investment support from sovereign wealth funds from the UAE and Qatar.
It is reported that Gulf funds, including Abu Dhabi Investment Authority, Qatar Investment Authority, and GQG Partners are commencing negotiations on investment. Jefferies India, ICICI Securities, and SBI Capital Markets are managing the sale while the company has recently raised 8 billion INR through a retail bond which was subscribed well.
As of October 23, 2024, Adani Enterprises Ltd has demonstrated a mixed performance across various time periods when compared to the benchmark S&P BSE SENSEX:
Year-to-Date (YTD) Return: ADANIENT.NS experienced a slight decline of -0.43%, underperforming the S&P BSE SENSEX, which posted a positive return of +10.86%.
1-Year Return: ADANIENT.NS delivered a positive return of +18.50%, though it still trailed behind the S&P BSE SENSEX's growth of +22.45%.
3-Year Return: Over a three-year period, ADANIENT.NS has shown robust growth with a return of +84.10%, significantly outperforming the S&P BSE SENSEX, which had a return of +31.67%.
5-Year Return: ADANIENT.NS's long-term performance has been exceptional, achieving a staggering return of +1,502.81%, far exceeding the S&P BSE SENSEX's return of +105.53%.
This performance shows its strong long-term growth, though it has faced recent short-term volatility.
Here is a comparison of Adani Enterprises Ltd with its peers in the thermal coal industry based on market performance:
Share Price: INR 2,835.55 (+0.42%)
Market Cap: INR 3.273 trillion
Industry: Thermal Coal
Share Price: INR 474.10 (+1.23%)
Market Cap: INR 2.922 trillion
Industry: Thermal Coal
Share Price: INR 355.50 (+8.25%)
Market Cap: INR 113.049 billion
Industry: Thermal Coal
Share Price: INR 355.25 (+8.09%)
Market Cap: INR 112.969 billion
industry: Thermal Coal
Takeaways:
Adani Enterprises leads with the highest market cap at INR 3.273 trillion, reflecting its position as a major player in the industry.
Coal India Ltd, a close competitor, holds a slightly lower market cap at INR 2.922 trillion but showed better share price growth at +1.23%.
Gujarat Mineral Development Corporation (GMDC) has the lowest market cap but the highest share price growth, over +8%, reflecting strong recent performance despite its smaller size.
This comparison highlights Adani Enterprises' dominance in size while showcasing Coal India and GMDC as competitive players in terms of share price movement.
As of October 21, 2024, Adani Enterprises Ltd shows the following key valuation measures and financial highlights:
Market Cap: INR 3.39 trillion
Enterprise Value: INR 4.00 trillion
Trailing P/E Ratio: 87.33
Price/Sales (ttm): 3.41
Price/Book (mrq): 8.68
Enterprise Value/Revenue: 4.03
Enterprise Value/EBITDA: 40.67
Profit Margin: 4.05%
Return on Equity (ROE): 10.80%
Revenue (ttm): INR 992.49 billion
Net Income Available to Common: INR 38.67 billion
Diluted EPS (ttm): 33.78
Total Cash (mrq): INR 43.81 billion
Total Debt/Equity (mrq): 147.81%
These metrics highlight the company’s strong market position with a high P/E ratio, indicating significant investor expectations, but also a high debt-to-equity ratio, suggesting leveraged growth.
Adani has been in a downtrend since hitting the most recent high of 3,743. It has gone ahead to break below an ascending trendline in play since February 2023. Currently, it is testing the 2,800 strong support level, which has been in play since January 2023.
Can it break it to this downside?
It looks like it will rebound and continue its uptrend overall.
If it likely to find support at the current level, it will rally all the way up to the 3,743 recent high, the 4,187 high and even way more above the level.
If it breaks the current level, it may continue to drop lower to the next support level at around 2180 level.
We assume that Adani Enterprises continues its overall uptrend, benefiting from expansions in renewable energy, infrastructure, and other ventures.
Adani Enterprises Ltd has shown strong growth across sectors like mining, infrastructure and renewable energy, with record EBITDA and rising revenues. Despite market volatility, the stock is testing key support with potential for future gains.
Price predictions suggest steady growth driven by its diversified portfolio and expansions. While challenges like debt remain, the company’s outlook is optimistic as it leverages opportunities in green energy and infrastructure.
