Adani Group FY24 profit jumps 55% to cross Rs 30,000 crore. Jefferies likes 3 stocks

In signs that the apples-to-airport conglomerate is marching steadily on a growth path, after the Hindenburg crisis harmed its reputation last year, Adani Group's profit after tax (PAT) in FY24 has jumped 55% to Rs 30,768 crore.

Global brokerage firm Jefferies, which analysed the earnings data, has buy calls on 3 Adani stocks.

"During FY24, the Adani group EBITDA (i.e. for the listed universe) grew 40% YoY to Rs 660 billion, with more than doubling of Adani Power's EBITDA on capacity addition, higher vols, merchant contribution and lower imported coal prices. For other group companies, EBITDA growth was in the range of 16-33%, except Adani Wilmar which saw a YoY decline," Jefferies analysts said.

Adani Enterprise's 29% YoY EBITDA growth was led by growth in new incubating businesses - new energy, solar, airports and IRM trading businesses. Ambuja Cement's EBITDA scale up was led by a sharp uptick in unit EBITDA. Adani Port's EBITDA growth was led by 24% growth in volumes, while Adani Green's 33% EBITDA growth was driven by 2.8GW capacity addition and 100bps higher CUF.

Adani Energy Solutions' 16% EBITDA was driven by new line addition, and Adani Total Gas's 27% YoY growth was driven by 15% volume growth and gross margin expansion aided by lower gas costs. Adani Wilmar's EBITDA declined YoY due to inventory losses (dip in oil prices) and misalignment of hedges.

At the end of FY24, the group's net debt at the group level remained stable at Rs 2.2 trillion in FY24 vs Rs 2.3 trillion. Net debt/EBITDA improved materially to 3.3x FY24 EBITDA vs 5x YoY. Adani Ports and Adani Power saw a drop in net debt in FY24. The increase in leverage for Adani Enterprises and Adani Green was on the back of new capex projects undertaken by companies, the report said.

The analysis excludes NDTV while FY23 for Adani Cement was 15-month period.

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Adani stocks to buy

Jefferies has buy calls on Adani Enterprises (target price Rs 3,800), Adani Ports (target price Rs 1,640) and Adani Energy Solutions (target price Rs 1,365).

"Operationally, Adani Ports is continuing to move from strength to strength, with market share moving up to 27% from 14% in FY15 and expected to be 30%+ by FY26 27E. As core port EBITDA growth remains upward of double digits, backed by volumes, we remain positive on the stock," Jefferies said.

Adani Ports will also be included in Sensex with effect from June 24.

On Adani Energy, it said the company should see a 16% revenue CAGR and 32% EBITDA CAGR in FY24-27E, driven by locked-in growth in transmission, distribution and smart-metering business.

"AESL's management believes in minimising volatility in its asset base across parameters - debt is being refinanced and raised to match the life of the respective asset at a fixed rate as far as possible, vendor back-to-back arrangements to limit the impact of commodity price changes as far as possible and land studies, as right of way over thousands of km are key for commissioning transmission projects," Jefferies said.

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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)