Adani Group shares have registered exceptional performance on the Indian stock market, adding over Rs 2.6 lakh crore to their market capitalisation in two trading sessions after an earnings blowout ignited a bull run in the stocks.
Huge Gains Across Adani Group Shares
On June 3, shares of Adani group continued their upward march for the second straight session. Here’s how much each of the key companies surged:
- Adani Enterprises: Increased by 7%
- Adani Energy Solutions: Jumped 8%
- Adani Ports and SEZ: Gained 9%
- Adani Power: Rose 12%
- Adani Green Energy: Up 7%
- Adani Total Gas: Increased by 7%
- Adani Wilmar: Up 3.5%
- Ambuja Cement: Gained 4%
- ACC: Rose 3%
- NDTV: Up 5%
Market Cap Soars
In terms of market cap addition, Adani Power was the biggest contributor over the past two days with its market value ballooning by Rs47,000 crore to over Rs3.3 lakh crore followed by Adanient that added more than Rs61,000 crore taking its market value beyond Rs4 lakh crore.
Other major additions were seen in:
- Adani Green Energy: Over Rs 42,000 crore
- Adani Ports: Over Rs 42,000 crore
- Adani Total Gas: Over Rs 21,000 crore
- Ambuja Cement and Adani Energy Solutions: Over Rs 13,000 crore each
The total market capitalisation of Adani Group firms, which stood at INR 17 tn two days ago, surged to nearly INR 19.65 lakh crore.(20-30 WORDS)
Earnings Drive Stocks
The massive rally in Adani Group shares is backed by a strong improvement in earnings in FY24. The group’s Ebitda jumped 40% YoY to INR660 billion, mainly driven by adanipower with ebitda doubling due to capacity expansion, higher volumes, merchant contributions and lower imported coal prices.
A short-seller report in late FY23 had impacted the group’s market cap negatively, Jefferies India said.
However, during FY24 the focus was on deleveraging and depledging the founders’ shares. As a result, total group ebitda grew by 40% YoY and fresh equity/debt/strategic funds were raised by the group while promoters hiked their stake in group cos & mkt cap rebounded. The group now plans a significant expansion with $90bn capex over next decade.
EBITDA Growth at Other Adani Group Firms
All other companies under the group posted strong growth except adaniwilmar that saw a decline:
- Adani Enterprises: 29% YoY growth, led by new businesses like ANIL/solar and Airports, and IRM trading.
- Adani (Ambuja) Cement: EBITDA increase driven by a significant rise in unit EBITDA.
- Adani Ports: 24% increase in volumes driving EBITDA growth.
- Adani Green Energy: 33% EBITDA growth due to capacity expansion and higher CUF.
- Adani Energy Solutions: 16% EBITDA increase from new line additions.
- Adani Total Gas: 27% YoY growth from volume increases and margin expansion due to lower gas costs.
In spite of notable growth, the entire debt of the company remained unchanged in the fiscal year 2024 which includes cement business acquisition debts that accounts to Rs 2.2 trillion compared with the previous year’s Rs 2.3 trillion . Netdebt/EBITDA ratio recorded a great improvement as it decreased to about 3.3x in FY24 from roughly 5 times YoY.Adani power and Adani Ports witnessed a decline on their net debt while Adani Enterprise and Adani Green were highly levered due to fresh capital expenditure plans.
The Adani Group has been attracting investors’ attention by their strong performance and strategic growth plans. If they keep up this momentum while handling their debts smartly, then the future may be bright for them as indicated by nearly Rs20 lakh crore market cap of this conglomerate.
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