Adani Enterprises share price down 2%: 3 key reasons why Jefferies expects 20% plus upside for the stock post Q1 results

Stock Market Today: Gautam Adani led Adani Enterprises share price remains in focus post Q1 Results and FMCG division demerger announcements. Adani Enterprise share price has risen almost 27% during last one year. The Adani Enterprises share price was down almost 3% in morning trades on Friday on a day when benchmark indices also were down more than 1%

Adani Enterprise during the Quarter ending June 2024 saw its net profit more than double (ie almost 116% y-o-y rise) to ₹1,454 crore, over the last year same quarter's ₹674 crore.

Jefferies India Pvt ltd has given target price of ₹3800 for the stock indicating more than 20% upside for the Adani Enterprises share price trading at close to ₹3130 levels.

Here are 3 Key reasons why Jefferies expects more than 20% upside

1.Strong operating performance beats estimates

Adani Enterprises Q1 earnings before interest tax depreciations and amortisation grew 49% YoY to Rs4300 Crore ahead of estimates of around ₹3700 crore as per Jefferies India Pvt Ltd. The 4.6x year on year in new energy and 33% year on year growth in airport segment Ebitda. Adani Enterprise is riding on the Industry tailwinds of new incubating businesses and these contributed 60% plus of consolidated EBITDA in 1Q, highlighted Jefferies.

2Adani Enterprises -Gradual value unlocking

Analysts at Jefferies believe that gradual value unlocking of various businesses will playout over next few years. The board already has approved the demerger of its FMCG division to Adani Wilmar, slated to complete by FY25 end

Investment Thesis-

Over the past decade , Adani Enterprises has fostered several industry-leading businesses of ports, power, city gas distribution, transmission, and FMCG sectors. Adani Group is renowned for the scale and execution of its infrastructure projects. projects. Jefferies analysts believe that the new businesses under Adani Enterprises (Green Hydrogen, Airports, Data Center, Roads, Copper) will emerge as Industry leaders and that Adani Enterprises will be key beneficiaries from green energy and sustainability push by govt via its integrated Green Hydrogen ecosystem, The underpenetrated Indian aviation story via Airport business and a pseudo consumer play. The digital economy push via Data Center biz, and another key driver will be import substitution via new businesses such as Copper, PVC.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions