Jefferies goes bullish on Adani Group, recommends 'Buy' for 4 Group companies

New Delhi, May 31 (IANS) A new Jefferies report has recommended ‘Buy’ on Adani Enterprises, Adani Ports, Adani Energy Solutions, and Ambuja Cements, as Adani Group clocked an impressive 40 per cent EBITDA growth (YoY) in FY24.

The global investment bank and financial services firm turned bullish on Adani Group, India’s largest infrastructure developer, after it delivered a stellar performance in FY24.

Despite the setback from the short-seller report in late FY23, the Adani Group has emerged unfazed with its businesses showing solid resilience and turning the ‘setback' into a comeback.

The report said while the group EBITDA (a widely used profit parameter for infrastructure companies) recorded a 40 per cent year-on-year growth in FY24, the leverage ratio improved to a multiyear low at group level.

“During FY24, the group focused on containing debt, reducing founders' share pledge. Its total group EBITDA grew 40 per cent (year-on-year) in FY24; the group raised fresh funds from equity and strategic investors, the promoter increased stake in group companies, while debt and group market cap rebounded,” the report said.

“The group is back on an expansion spree and eyeing $90 billion capex over the next decade,” it added.

Adani Enterprises is scaling its captive manufacturing capacity towards starting Green Hydrogen production by FY27.

“The Navi Mumbai Airport appears likely to be commissioned by March FY25; Data Centre projects are scaling up,” the report said.

Adani Ports recently published its five-year business road map, targeting 18 per cent EBITDA CAGR in FY24-29E.

“Adani Ports' EBITDA is expected to rise at 16 per cent CAGR led by expansion and ramp-up with the company targeting 1bnt cargo volume by 2030 (15 per cent CAGR),” the report noted.

Adani Energy Solutions’ EBITDA growth at 16 per cent was driven by new line addition, while Adani Total Gas' 27 per cent YoY growth was driven by 15 per cent volume growth and gross margin expansion aided by lower gas costs.

At Ambuja Cements, the management continues to guide the doubling of cement capacity and scaling up in unit EBITDA to industry-leading Rs 1,450-1,500/T by FY28, according to the Jefferies report.