Adani Enterprise Is it going to Make it BIG/BAD??????
Adani Enterprises Limited (AEL) has demonstrated notable financial performance recently. In the quarter ending September 30, 2024, the company reported a consolidated net profit of ₹1,742 crore, marking a substantial increase from ₹228 crore in the same period the previous year. This growth is attributed to strong earnings from its airports and new energy units, which offset declines in the coal trading sector.
Additionally, AEL has been expanding its operations. The company commenced operations at its copper smelter in Mundra, Gujarat, aiming to reduce India's reliance on refined copper imports. The smelter is expected to reach its full capacity of 500,000 metric tons by February-March 2025, with plans to scale up to 1 million tons by 2028-29.
Value
1)The intrinsic value of one ADANIENT stock under the base case scenario is 2 969.596 INR. Compared to the current market price of 2 399.8999 INR, Adani Enterprises Ltd is undervalued by 19%.
2) The Relative Value of one ADANIENT stock under the base case scenario is 4 832.4164 INR. Compared to the current market price of 2 399.8999 INR, Adani Enterprises Ltd is undervalued by 50%.
3)According to Wall Street analysts, the average 1-year price target for ADANIENT is 4 340.1 INR with a low forecast of 3 838 INR and a high forecast of 4 945.5 INR.
Relative Value is the estimated value of a stock based on various valuation multiples like P/E and EV/EBIT ratios. It offers a quick snapshot of a stock's valuation in relation to its peers and historical norms.
Revenue and Profitability:
1)Revenue: In the fiscal year 2023-24 (FY24), AEL reported a revenue from operations of ₹96,421 crore, a 24.3% decrease from ₹127,540 crore in FY23.
2)EBITDA: Despite the revenue decline, EBITDA increased by 32% to ₹13,237 crore in FY24, up from ₹10,012 crore in FY23.
3)Net Profit: The net profit for FY24 rose by 39.6% to ₹3,955 crore, compared to ₹2,833 crore in the previous fiscal year.
Quarterly Performance (Q2 FY25):
For the quarter ending September 30, 2024, AEL's net profit surged to ₹1,742 crore, a significant increase from ₹228 crore in the same period the previous year.
Balance Sheet Highlights:
1)Assets: Total assets increased by 13.7% to ₹1,606 billion in FY24, up from ₹1,413 billion in FY23.
2)Liabilities: Total liabilities grew by 13.7% to ₹1,606 billion in FY24, with long-term debt rising by 42.2% to ₹463 billion.
3)Debt-to-Equity Ratio: The debt-to-equity ratio increased to 0.34 times in FY24 from 0.21 times in FY23, indicating higher leverage.
Cash Flow:
1)Operating Activities: Cash flow from operating activities stood at ₹103 billion in FY24.
Investing Activities: Cash outflow from investing activities was ₹191 billion in FY24, reflecting ongoing capital expenditures.
2)Financing Activities: Cash flow from financing activities improved significantly to ₹89 billion in FY24.
Operational Highlights:
The company's growth was driven by its airport operations and green energy business, with the new energy segment's pre-tax profits doubling to ₹9.41 billion, now comprising 39% of the overall profit.
Following the announcement of Hindenburg's disbandment, shares of Adani Group companies experienced a surge. For instance, Adani Enterprises' stock rose by 7.7%, reaching ₹2,569.85, and Adani Power's shares jumped 9% to ₹599.90 on the BSE.
Additionally, AEL has been expanding its operations. The company commenced operations at its copper smelter in Mundra, Gujarat, aiming to reduce India's reliance on refined copper imports. The smelter is expected to reach its full capacity of 500,000 metric tons by February-March 2025, with plans to scale up to 1 million tons by 2028-29.
Value
1)The intrinsic value of one ADANIENT stock under the base case scenario is 2 969.596 INR. Compared to the current market price of 2 399.8999 INR, Adani Enterprises Ltd is undervalued by 19%.
2) The Relative Value of one ADANIENT stock under the base case scenario is 4 832.4164 INR. Compared to the current market price of 2 399.8999 INR, Adani Enterprises Ltd is undervalued by 50%.
3)According to Wall Street analysts, the average 1-year price target for ADANIENT is 4 340.1 INR with a low forecast of 3 838 INR and a high forecast of 4 945.5 INR.
Relative Value is the estimated value of a stock based on various valuation multiples like P/E and EV/EBIT ratios. It offers a quick snapshot of a stock's valuation in relation to its peers and historical norms.
Revenue and Profitability:
1)Revenue: In the fiscal year 2023-24 (FY24), AEL reported a revenue from operations of ₹96,421 crore, a 24.3% decrease from ₹127,540 crore in FY23.
2)EBITDA: Despite the revenue decline, EBITDA increased by 32% to ₹13,237 crore in FY24, up from ₹10,012 crore in FY23.
3)Net Profit: The net profit for FY24 rose by 39.6% to ₹3,955 crore, compared to ₹2,833 crore in the previous fiscal year.
Quarterly Performance (Q2 FY25):
For the quarter ending September 30, 2024, AEL's net profit surged to ₹1,742 crore, a significant increase from ₹228 crore in the same period the previous year.
Balance Sheet Highlights:
1)Assets: Total assets increased by 13.7% to ₹1,606 billion in FY24, up from ₹1,413 billion in FY23.
2)Liabilities: Total liabilities grew by 13.7% to ₹1,606 billion in FY24, with long-term debt rising by 42.2% to ₹463 billion.
3)Debt-to-Equity Ratio: The debt-to-equity ratio increased to 0.34 times in FY24 from 0.21 times in FY23, indicating higher leverage.
Cash Flow:
1)Operating Activities: Cash flow from operating activities stood at ₹103 billion in FY24.
Investing Activities: Cash outflow from investing activities was ₹191 billion in FY24, reflecting ongoing capital expenditures.
2)Financing Activities: Cash flow from financing activities improved significantly to ₹89 billion in FY24.
Operational Highlights:
The company's growth was driven by its airport operations and green energy business, with the new energy segment's pre-tax profits doubling to ₹9.41 billion, now comprising 39% of the overall profit.
Following the announcement of Hindenburg's disbandment, shares of Adani Group companies experienced a surge. For instance, Adani Enterprises' stock rose by 7.7%, reaching ₹2,569.85, and Adani Power's shares jumped 9% to ₹599.90 on the BSE.
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