Adani Ent Hits New High, Nears Pre-Hindenburg Level; Adani's Top Stock May Rise By Rs 1,000-1,500 Ahead

Adani Group's most valued stock and flagship company, Adani Enterprises rose mightily on Wednesday with the share price hitting a new 5-week high of Rs 3,275 apiece on BSE. The stock has neared its pre-Hindenburg level, and it has the potential to wipe out the US short seller's impact in the coming months. Adani Group's top stock has been in focus after its Q3 results. Experts are predicting over Rs 4,000 mark target prices.

So far, Adani Enterprises share price is seen to rise by Rs 1,000 to Rs 1,500 per share in coming months. The latest report by American financial services firm, Cantor Fitzgerald believes Adani Enterprises is at the core of everything India wants to accomplish.

The target prices for Adani Enterprises are Rs 4,368 and Rs 4,688, and the timeframe to achieve this level is predicted in 12 months.

On BSE, Adani Enterprises share gained by at least 2.2% to hit a new 52-week high of Rs 3,275.00 apiece during Wednesday's trade. Adani is now just a couple of hundred rupees away from hitting its highest level of Rs 3,879 apiece which was on January 1, 2023, before Hindenburg's scandalous shocks.

Going by the target prices, Adani Enterprises may as well wipe out the impact of Hindenburg on its stock price in 2024.

In Q3FY24, Adani Enterprises reported a PAT of Rs 1,888 crore, rising by a huge 130% from Rs 820 crore in the same quarter a year ago. While total income climbed by 7% YoY to Rs 28,827 crore, and EBITDA zoomed by 89% YoY to Rs 3,717 crore.

As per Trendlyne data, the consensus recommendation from 1 analyst for Adani Enterprises Ltd. is STRONG BUY. The average target price is Rs 4,688 apiece on Adani Enterprises. This is the highest target price for the flagship arm of the port-to-power empire driven by Gautam Adani. This will imply a further potential upside of Rs 1,447.6 per share on the new 52-week high,

Meanwhile, just before earnings, Cantor's report said, "We are initiating coverage of Adani Enterprises Limited (AEL) with an Overweight rating and Rs 4,368 12-month PT. India is now the most populous country in the world and has ambitions to be the world's third-largest economy by 2030."

Cantor's report further said, "To get there, India needs to invest in both digital and physical infrastructure, in addition to increasing its energy production, as energy consumption will be meaningfully higher. We believe these investments are paramount for India to drive productivity growth, as GDP per capita of ~ $2,250 is meaningfully below that of China ($12,556). To that extent, we believe AEL is at the core of everything India wants to accomplish."

Gautam Adani's AEL is the most relied upon company for bringing energy resources into India; it owns eight airports that account for ~25% of airline passenger traffic and ~33% of cargo, it is building several data centres throughout the country and It is contracted to lay more than 5,000 km of roads, and is an integral manufacturer of solar and wind equipment for India's renewable energy ambitions, among numerous other businesses, as per Cantor.

Further, the American brokerage said, "We believe AEL's current valuation is largely driven by three main segments: airports, roads, and its new energy ecosystem, which in our view, means investors are getting a free call option on the rest of AEL's business, which accounted for 85%+ of revenue in FY23 and includes many businesses that are in incubation phase and will materially contribute to financials over the coming years. As such, we believe risk/ reward is attractive at current levels."

Also, the brokerage's note added, "We also believe our target multiples for these three segments are justified, as we use close peers to determine our target
multiple and have assigned a premium to those multiples based on our expectations for the respective segment to outgrow that of its closest peers. This means that
shareholders, in our view, are effectively getting the other six businesses for free, which partially explains why we believe shares are attractive at current levels. Our SOTPderived price target would imply a target FY26E EV/EBITDA multiple of 23.5x, which compares to shares currently trading at 13.9x our FY26 EBITDA estimate."

Furthermore, Cantor's note said, "Our valuation does not assign any value to AEL's green hydrogen ambitions, which management believes could be a $7.5bn+ EBITDA business per year. As we approach FY27E, when Phase 1 of its green hydrogen facility becomes operational, we expect this will serve as an additional potential catalyst to propel shares higher."

Adani Enterprises Limited (AEL) is the flagship company of Adani Group, one of India's largest business organisations. Over the years, Adani Enterprises has focused on building emerging infrastructure businesses, contributing to nation-building and divesting them into separate listed entities.

Having successfully built sizeable and scalable businesses like Adani Ports & SEZ, Adani Energy Solutions, Adani Power, Adani Green Energy, Adani Total Gas and Adani Wilmar, the company has contributed to making India self-reliant with its robust businesses.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.