Jan 25: Adani Enterprises Ltd (ADANIENT) is one of the largest and most diversified trading companies in India, with interests in coal mining, gas distribution, renewable energy, airports, ports, logistics, agribusiness, and defense. The company is part of the Adani Group, which is led by billionaire Gautam Adani, who is also one of the richest people in India.
In this blog post, we will review the stock performance of Adani Enterprises in the past year, and analyze its financials, valuations, growth prospects, and risks.
Stock Performance
Adani Enterprises has been one of the best-performing stocks in the Indian market in 2023-2024, delivering a staggering return of 450.54% in the past three years. The stock has outperformed its peers such as Adani Ports and Special Economic Zone Ltd (ADANIPORTS), Adani Power Ltd (ADANIPOWER), and Adani Green Energy Ltd (ADANIGREEN), as well as the broader Nifty 50 index.
The stock has been driven by several factors, such as:
- Strong revenue and earnings growth, fueled by robust demand for coal, gas, and renewable energy in India and abroad.
- Expansion into new businesses and sectors, such as airports, defense, and data centers, offer long-term growth potential and diversification benefits.
- Positive market sentiment and investor confidence, are supported by the Adani Group’s reputation, vision, and execution capabilities.
- Favorable government policies and regulatory environment, facilitate the development of infrastructure and energy projects in India.
As of January 25, 2024, the stock was trading at Rs 2,832.25 per share on the National Stock Exchange (NSE), with a market capitalization of Rs 3.40 lakh crore. The stock had a 52-week high of Rs 3,739.95 and a 52-week low of Rs 1,017.45. The stock had a price-to-earnings (PE) ratio of 139.34 and a price-to-book (PB) ratio of 15.30.
Financials
Adani Enterprises has reported impressive financial results in the past few quarters, despite the challenges posed by the COVID-19 pandemic and its impact on the economy. The company has shown resilience and adaptability in managing its operations and cash flows.
In the second quarter of fiscal year 2024 (Q2 FY24), which ended on September 30, 2023, the company reported a revenue of Rs 225.17 billion, a decline of 41.02% year-on-year (YoY), but an increase of 9.49% quarter-on-quarter (QoQ). The revenue decline was mainly due to the deconsolidation of Adani Wilmar Ltd (AWL), which was listed on the stock exchanges in December 2023.
The company reported a net profit of Rs 2.28 billion, a decline of 50.57% YoY, but an increase of 23.91% QoQ. The net profit margin was 1.01%, down from 2.05% YoY, but up from 0.82% QoQ. The net profit decline was mainly due to higher tax expenses and lower other income.
The company reported earnings before interest, taxes, depreciation, and amortization (EBITDA) of Rs 25.12 billion, an increase of 24.81% YoY and 10.67% QoQ. The EBITDA margin was 11.16%, up from 8.94% YoY and 10.16% QoQ. The EBITDA growth was mainly due to higher contributions from coal mining and gas distribution segments.
The company had a cash and short-term investments balance of Rs 84.13 billion as of September 30, 2023, an increase of 104.63% YoY. The company had a total debt of Rs
