Adani Group posted mixed results in Q1. Check what analysts are saying

Billionaire Gautam Adani-led Adani Group, which hogged the limelight after the latest report by the US-based short seller Hindenberg Research, has posted a mixed set of results for the quarter ended June 30 (Q1FY25). Where net profit of Adani Enterprises increased by 116% to Rs 1,454.50 crore in Q1FY25, Adani Green Energy posted 39% growth in the bottom line at Rs 446 crore during the quarter under review. On a year-to-date basis, shares of Adani Enterprises and Adani Green Energy have gained 10% till August 12.   On the other hand, Adani Energy Solutions reported a loss of Rs 823.92 crore during the quarter under review. It had posted a profit of Rs 175.06 crore in the same quarter last year (Q1FY24).   Adani Power witnessed a 55% year-on-year (YoY) decline in net profit at Rs 3912.79 crore and Ambuja Cements’ net profit fell nearly 29% YoY to Rs 646.31 crore during the quarter under review. ACC posted 22.47% fall in net profit at Rs 361.36 crore for the quarter ended June 30 against Rs 466.10 crore in the same quarter last year.   Shares of Adani Energy Solutions have advanced just 2% on a year-to-date basis. Adani Power, Ambuja Cements, and ACC have rallied 30%, 22%, and 5% YTD, respectively. Motilal Oswal Financial Services is positive on ACC with a target price of Rs 3,300. Shares of the company traded at Rs 2,320 in the afternoon trade on August 12.   “ACC’s performance in Q1FY25 was below our estimate mainly due to lower-than-estimated realisation. Cement prices are estimated to remain under pressure in the near term due to monsoons. However, it is witnessing a steady improvement in opex/t led by various cost reduction initiatives. Expected improvement in profitability, led by cost-saving initiatives, strong brand positioning, and structural changes in the operations will drive re-rating in the stock,” the brokerage said.   On the other hand, Emkay Global Financial Services is bullish on Ambuja Cements with a target price of Rs 750. “Based on the cost-savings initiatives and growth visibility, we raise our target multiple to 20x (earlier, 18x),” Emkay Global Financial Services said in a report.   The net loss of NDTV widened to Rs 46.75 crore against a loss of Rs 8.13 crore during the same period. Adani Wilmar reported a profit of Rs 313.20 crore in Q1FY25 against a loss of Rs 78.92 crore in the same quarter last year. Shares of NDTV have declined nearly 23%YTD, while Adani Wilmar has gained 5% during the same period.   Adani Ports and Special Economic Zone (APSEZ) reported 47% growth in net profit at Rs 3,112.83 crore during the quarter under review. Adani Total Gas reported a 14% rise in the bottom line figure at Rs 171.84 crore in Q1FY25. Shares of Adani Ports have advanced 47% in 2024 so far. On the other hand, Adani Total Gas retreated nearly 16% during the same period. Motilal Oswal is positive on Adani Ports also with a target price of Rs 1,790.   “APSEZ targets becoming India’s largest integrated transport utility and the world’s largest private port company by 2030. The company has a diversified cargo mix and is looking to increase the cargo share of ports on the East Coast. We expect APSEZ to report 11% growth in cargo volumes over FY24-26. This would drive revenue, EBITDA, PAT CAGR of 14%, 15%, and 19%, respectively, over FY24-26,” Motilal Oswal Financial Services said in a report.   Shares of Adani Group companies came under pressure after Hindenburg Research suggested alleged links between Sebi Chairperson Madhabi Puri Buch and her husband Dhaval Buch and an offshore fund tied to the Adani Group. While the Adani Group, the market regulator Sebi and the Buchs issued clarifications, Adani stocks fell on a knee-jerk reaction to fresh Hindenburg allegations.   Kranthi Bathini, Equity Strategist, WealthMills Securities said, “Stock prices are slaves to earnings. I would be more concerned if the Hindenburg report raised issues that could impact the Adani Group’s earnings.” On the other hand, Vinit Bolinjkar of Ventura Securities does not see Hindenburg allegations as serious.   Overall, the combined consolidated net profit of 10-listed Adani Group firms declined 29% YoY to Rs 9,548.16 crore in Q1FY25 against Rs 13,480.01 crore in the same quarter last year.