Adani Green, Adani Total Gas, Adani Energy Solutions: Share price targets as Ventura re-initiates 'Buy' calls

Ventura Securities has come out with earning reviews on at least four Adani group companies namely Adani Green Energy Ltd, Adani Total Gas Ltd, Adani Wilmar Ltd, Adani Energy Solutions Ltd. The brokerage has retained its positive view on all four, while its target price on three of the four stocks hinted at decent upside potential ahead. Ventura said it is positive on Adani Wilmar Ltd but did not offer any price target on the stock.

Adani Green Energy

In the Adani of Adani Green Energy, Ventura said the robust growth in revenue, Ebitda and cash profit is primarily driven by capacity addition of 1,154 MW over the past year and improved capacity utilisation factor (CUF). Adani Green's operational capacity grew at 16 per cent YoY to 8,478 MW with greenfield addition of 700 MW solar-wind hybrid, 304 MW wind and 150 MW solar projects and is on track to add another 2000 MW in Q4FY24.

"Furthermore, the group has already secured plans to achieve a substantial milestone of 20 GW of renewable energy capacity by FY26. This capacity expansion aligns with the group's broader strategy to enhance operational efficiency and reduce leverage levels across its verticals," it said.

The company has re-initiate 'Buy' coverage on the stock with a revised price target of Rs 1,889 from previous target of Rs 3,581 published in September 2022.

Adani Total Gas

Ventura continued to remain positive on Adani Total Gas' growth story and re-initiate BUY coverage on the stock with a downward DCF based revised price target of Rs 1,340 from previous target of Rs 3,475. For Adani Total Gas, Ventura forecast revenue, Ebitda and PAT to grow at a CAGR of 25.3 per cent, 39.9 per cent and 42.6 per cent, respectively, over the period FY23 to FY26. Ebitda margin and profit margin are also expected to improve 780 basis and 570 bps to 27.7 per cent and 17.8 per cent, respectively. Return ratios ROE and ROIC are set to expand to 26.1 per cent and 31 per cent.

"ATGL has once again achieved a robust double-digit growth in volumes, recording a significant 13 per cent year-on-year increase over the first nine months. The upsurge in volume, combined with strategic gas sourcing and a vigilant approach to operating expenses, has resulted in a noteworthy 20 per cent year-on-year increase in Ebitda during this period," it said.

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Adani Energy Solutions

Ventura said Adani Energy Solutions Ltd presented a mixed financial performance, with an increase in YoY revenue but a decrease in profitability due to higher opex of new projects.

Over FY23-26, Ventura is expecting the company’s revenue, Ebitda and net earnings are seen growing at a CAGR of 20.9 per cent, 30 per cent and 55.3 per cent, respectively. EBITDA and net margins are expected to improve 1014 bps to 51.9 per cent and 546 bps to 20 per cent, respectively, over the same period. As a result, return ratios – RoE and RoIC – are expected to improve by 58 bps to 22.3 per ecnt and 269 bps to 13.8 per cent, respectively, by FY26.

"We continue to remain positive on AESL’s growth story and re-initiate BUY coverage with a downward DCF based revised price target of Rs 1,502 from previous target of Rs 4,172, published in September 2022). The downward revision in target is attributed to upfront capex on smart metering project, increase in risk-free rate and rising stock's beat.

Adani Wilmar

Ventura did not share target on Adani Wilmar but said it continue to remain positive on its growth story on account of rapid scale up of FMCG and Packaged food business and shift to value added products. Over the period FY24-26E, it expects Adani Wilmar revenue to grow at 7 per cent to R 61,077 crore,  driven by a 20 per cent CAGR in the FMCG and Packaged Food business to Rs 4,338 crore, 20 per cent CAGR in the Edible Oil business to Rs 47,973 crore and 2 per cent CAGR decline in the Industry Essentials business to Rs 6,648 crore.

"The company Ebitda margin is set to expand by 10 bps to 3 per cent in FY26. Ebitda is expected to grow at 5 CAGR to Rs 1,838 cr in FY26. PAT is expected to grow at a CAGR of 6 per cent to Rs 623 crore with stable margins at 1 per cent," it said.

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