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Adani group saw 1,000% jump in m-cap in three years; what’s next?

Adani group saw 1,000% jump in m-cap in three years; what’s next?

This is visible in nearly 1,120 per cent growth in the total market capitalisation of the group firms during the past three years. Meanwhile, shares of this group's companies soared between 500-5,100 per cent during the same period.

This group sees 1,000% jump in m-cap in three years; what’s next? (Photo: Reuters) This group sees 1,000% jump in m-cap in three years; what’s next? (Photo: Reuters)

Billionaire Gautam Adani-led group firms have been firing on all cylinders on Dalal Street. This is visible in nearly 1,120 per cent growth in the total market capitalisation of the group firms during the past three years. Meanwhile, shares of group companies soared between 500-5,100 per cent during the same period.

With a rally of 5,102 per cent, Adani Green Energy emerged as the top gainer on the list. Shares of the firm spiked to Rs 2,411 on August 19, 2022 from Rs 46.32 on the same day in 2019. Other players including Adani Enterprises, Adani Total Gas, Adani Transmission, Adani Power and Adani Ports and SEZ gained 2,208 per cent, 2,115 per cent, 1,559 per cent, 584 per cent and 144 per cent, respectively.

The group’s recently listed firm Adani Wilmar also traded 219 per cent higher than its issue price of Rs 230. Shares of the company made their debut on bourses on February 8, 2022.

Commenting on the ongoing momentum in the Adani group of stocks, Kranthi Bathini, Equity Strategist, WealthMills Securities said, “The economic environment has been in the favour of Adani group business models. As a result, they are firing on all cylinders amid the ongoing momentum.”

For the latest quarter ended June 30, 2022, the consolidated profit of all listed Adani group firms jumped nearly 155 per cent year-on-year (YoY) to Rs 6,897.85 crore. The figure stood at Rs 2,705.84 crore in the same quarter last year. On the other hand, cumulative sales of the group firms also increased by 102 per cent to Rs 79,769.97 crore during the quarter under review.

Among the top performers, Adani Power reported 1,618 per cent growth in the bottom line in Q1FY23 on a 109 per cent rise in net sales. The net profit of Adani Enterprises and Adani Wilmar also grew 109 per cent and 19 per cent, respectively, during the same period. On the other hand, the net profit of Adani Transmission, Adani Ports, Adani Green Energy and Adani Total Gas declined 61 per cent, 22.60 per cent, 0.90 per cent and 0.40 per cent, respectively, on YoY basis.

Considering the present quarterly results, brokerages are bullish on the select Adani group of stocks. Take this: Centrum Broking is positive on Adani Ports with a target price of Rs 920, indicating an upside of over 5 per cent from the current market price. Likewise, KRChoksey Shares and Securities has an ‘Accumulate’ rating on Adani Wilmar with a target price of Rs 751.

“Adani Wilmar (AWL) has shown strong growth in both volume and value terms across categories with market share gains in edible oil, atta and rice. Despite the increase in input costs, the company has been able to maintain its margins. AWL’s focus on penetration-led growth with increasing its reach is yielding results for the company,” KRChoksey said in a report.

While sharing his views on the group firms, Bathini said, “Despite the macro headwinds and stretched valuations, the uptrend may continue in the group stocks. The flagship company Adani Enterprises can surprise further given the embedded business value.”

At present, the market capitalisation of six group firms including Adani Green Energy, Adani Enterprises, Adani Total Gas, Adani Transmission, Adani Power, Adani Ports and Special Economic Zone are hovering somewhere between Rs 1 lakh crore and Rs 4 lakh crore. The market valuation of these firms were between Rs 7,000 crore to 74,000 crore three years back.

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