Adani Group Stocks :Global investment firm Jefferies is bullish on Gautam Adani Group and has given a buy rating to some of the group’s stocks. The brokerage says that Gautam Adani Group is eyeing capex of $100 billion in the next 10 years. The group’s focus is on energy transition as well as digital infrastructure, which is yielding benefits. The group’s operational performance is better and achieved $10 billion EBITDA (including OI) in FY 2024, which is a growth of more than 40 percent on an annual basis.
Eyes on $100 billion capex
According to Jefferies, Adani Group is in the midst of increasing capacity in the business and is eyeing a capex plan of US$100 billion over the next decade. This includes major outlays on energy transition projects and manufacturing capacities for green energy components.
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Group EBITDA increased by 40%
According to Jefferies, according to the management, Adani Portfolio achieved $10 billion EBITDA (including OI) in FY24, which is more than 40 per cent year-on-year growth (Adani Portfolio). More than 80 per cent of EBITDA came from infra-related businesses. Management also talked about the high cash after tax (FFO) to EBITDA ratio for the business, with FFO being sufficient to cover all debt maturities.
Leverage at its strongest in several years
Per Jefferies mgmt, contracted EBITDA is 80% of total group EBITDA and cash reserves are more than 20% of total borrowings, which helps address group cash flow and system risks. Management does not see refinancing risk at the group level. Effective capital management planning is reflected in rate profile stability over increasing duration, despite rate end and FX volatility.
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Digital Infra
The management believes that with its national footprint, the Adani Group is able to establish multiple touch points with Indian consumers. The management expects a demographic dividend to be seen. The consumer base on Adani’s core infra platform already stands at 350 million users. The group will try to leverage this in the mid-term.
Stocks and ratings
Adani Enterprises : Buy
Adani Cement (Ambuja Cement) : Buy
Adani Energy Solutions : Buy
Adani Green : NC
(source: Jefferies)
The group has immense potential
Gautam Adani said in the annual meeting of shareholders that his group, which ranges from ports to energy business, is stronger than ever and its best is yet to come. He said this citing record earnings, strong cash position and lowest debt ratio. Adani said that India is moving towards becoming a $10,000 billion economy by 2032 and infrastructure is expected to grow at a rate of 20-25 percent to reach $2,500 billion. In such a situation, Adani Group, being an infrastructure company, is in a good position to take advantage of this opportunity. Adani said that the cash with the group has increased to Rs 59,791 crore, which is the highest level ever. With record results, strong cash position and lowest loan ratio, we have immense possibilities in front of us.
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