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Adani Group’s FY24 Profit Soars by 55%, Jefferies Recommends Key Stocks
Adani Group’s profit after tax (PAT) for FY24 surged by 55% to Rs 30,768 crore, showcasing robust growth despite the challenges posed by last year’s Hindenburg crisis. Analysts at global brokerage firm Jefferies have recommended buying three Adani stocks following their analysis of the earnings data. In FY24, the Adani group’s earnings before interest, taxes, depreciation, and amortization (EBITDA) for its listed companies increased by 40% year-on-year to Rs 660 billion.
Adani Power’s EBITDA more than doubled due to capacity expansion, higher volumes, increased contribution from merchant sales, and reduced imported coal prices. Most other group companies also experienced EBITDA growth ranging from 16% to 33%, with the exception of Adani Wilmar, which saw a decline.
Adani Enterprises recorded a 29% year-on-year growth in EBITDA, primarily driven by the expansion of new businesses such as renewable energy, solar, airports, and trading in industrial raw materials. Ambuja Cement’s EBITDA rose significantly due to improved unit economics. Adani Ports enjoyed a 24% growth in EBITDA fueled by increased volumes, while Adani Green posted a 33% growth in EBITDA thanks to capacity expansion and higher capacity utilization.
Adani Energy Solutions and Adani Total Gas also reported EBITDA growth, driven by new line additions, volume growth, and margin expansion. The group’s net debt remained stable at Rs 2.2 trillion in FY24, down slightly from Rs 2.3 trillion in the previous fiscal year. The net debt to EBITDA ratio improved to 3.3x in FY24 from 5x the previous year. Adani Ports and Adani Power saw a decrease in net debt, while Adani Enterprises and Adani Green saw an increase due to new capital expenditure projects.
Jefferies recommends purchasing stocks in Adani Enterprises, Adani Ports, and Adani Energy Solutions, with target prices set at Rs 3,800, Rs 1,640, and Rs 1,365 respectively. Adani Ports is expected to maintain its strong performance, with its market share projected to exceed 30% by FY26-27. Adani Energy Solutions anticipates significant revenue and EBITDA growth driven by its transmission, distribution, and smart-metering businesses. The company focuses on minimizing asset base volatility through debt refinancing, vendor back-to-back arrangements, and thorough land studies for commissioning transmission projects.
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