Adani Enterprises Receives New Buy Rating from Jefferies on ‘Industry-Leading’ Businesses

The Adani Group’s flagship company has seen significant growth and is expected by the research firm Jefferies to achieve a potential upside of 20%. Jefferies highlighted the Adani Group’s success in incubating industry-leading businesses and its strong execution of infrastructure projects, setting a target price of Rs 3,800 per share. Additionally, they set a best-case upside target of Rs 5,000, suggesting a potential surge of 58% from current prices.

The report expressed confidence that the new businesses under Adani Enterprises will emerge as industry leaders, positioning AEL as a key beneficiary. Strategic business investments in maturing and nascent businesses are central to the Adani Group’s growth. This includes ventures in airport operations, green hydrogen, roads, data centers, copper, aerospace and defense, PVC, and water infrastructure.

Adani New Industries plans to capitalize on the emerging green hydrogen opportunity with a significant investment in capacity over the next decade. The Adani Group is poised to benefit from government support and the privatization of airports, with plans for expansion and development in the airport sector. The group currently operates eight airports in India and is positioned to take advantage of the expected growth in the Indian data center industry.

Adani Enterprises is also making strides in the roads and construction business, with operational and developmental road assets and plans to build a comprehensive road asset portfolio. The company also has ambitious plans for its super-app, aiming to connect with 400 million users by 2030. The platform is expected to enhance synergies across Adani Group portfolio companies and improve customer engagement and monetization.

Notably, Adani Enterprises’ net debt to EBITDA ratio has shown improvement, dropping to 3.2 times in FY23 from over 6 times in FY14-18. While there are risks such as potential delays in project execution and re-emergence of leverage issues, the report remains positive about the company’s future prospects.