Adani Enterprises nears record high after strong Q2FY23; stock surges 5%

Shares of Adani Enterprises surged 5 per cent to Rs 3,767 in Friday’s intra-day trade and extended its gain to fourth straight day, after the company’s consolidated net profit for the quarter ended September (Q2FY23) more-than-doubled versus last year to Rs 461 crore. The company’s consolidated revenue, too, climbed nearly threefold year-on-year (YoY) to Rs 38,175 crore.

Meanwhile, consolidated earnings before interest, tax, depreciation, and amortisation (Ebitda) increased 69 per cent YoY to Rs 2,136 crore, which beat Street estimates. The bloomberg consensus estimates had pegged Ebitda to be around Rs 1,643 crore in Q2FY23.

"The robust growth in the topline and operational performance was on account of strong earnings show by integrated resource management business and airports vertical," the company said.

In the past one week, Adani Enterprises outperformed the market as shares surged 13 per cent, as against 1.3 per cent rise in the S&P BSE Sensex. The stock is inching towards its record high level of Rs 3,884, which it had hit on September 20, 2022.

Adani Enterprises is the flagship company of Adani Group. The company’s strategic business investments are centered around green hydrogen ecosystem, airport management, roads, data center and primary industry like copper and petrochemicals, all of which have significant scope for value unlocking.

Through Adani New Industries Ltd (ANIL), the group’s recent incubator in the production of renewable energy like green H2 and downstream products (ammonia, urea & methanol), Adani Enterprises (AEL) aims to emerge as the world’s primary leader in the green H2 ecosystem.

According to analysts, ANIL has a vision to be the lowest cost producer of green H2 in partnership with TotalEnergies and expect this platform to expand to global theatre in the forthcoming future. ANIL will leverage TotalEnergies balance sheet to help lower cost of funds, said analysts.

Apart from ANIL, AEL’s other businesses in the domains of airports, data centers, roads and defence are on the verge of gaining traction and should be value accretive in the short to medium term. AEL’s new forays into copper and green PVC have significant drivers in place to ensure long-term profitability, the brokerage firm Ventura Securities said.