70% upside! Adani Enterprises shares can hit Rs 5,999 level

Adani Enterprises has put in place a green energy platform ANIL, which is end-to-end self[1]sufficient providing fuel security and is expected to start production from early FY26.

Adani Enterprises revenue may rise 16.9 per cent CAGR to Rs 1,10,822 crore, said Ventura Securities. It expects Ebitda to jump 89.80 per cent CAGR to Rs 25,373 crore.

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Ventura Securities has updated its 24-month price target for Adani Enterprises to Rs 5,999, which suggests a potential 70 per cent from the prevailing market price. Ventura said the turbulence in the energy market due to the Russia-Ukraine war and climate change issues have necessitated a rapid switch to alternative clean fuel sources. It said green H2 has the most potential and Adani has made rapid progress to harness that opportunity. Adani’s airport business growth is now on autopilot, the roads business is now on fast lane and that coal business is mining handsome profit, Ventura said.

In a note, Ventura said Adani Enterprises has put in place a green energy platform ANIL, which is end-to-end self[1]sufficient providing fuel security and is expected to start production (0.29 MTPA)  from early FY26 scaling to 3.0 mpta by FY30. Over the period of FY22-25E, Ventura is expecting Adani Enterprises revenue to grow 16.9 per cent CAGR to Rs 1,10,822 crore, Ebitda to jump 89.80 per cent CAGR to Rs 25,373 crore and net profit to grow 128.1 per cent CAGR  to Rs 9,220 crore.

It expects Adani Enterprises’ Ebitda and net margin to improve 1755 basis points to 22.9 per cent and 720 bps to 8.3 per cent by FY25. It sees return ratios – RoE and RoIC – to improve 1,187 bps to 15.4 per cent and 386 bps to 8 per cent, respectively, by FY25.

“Of the entire eco-system of renewable energy required – solar (10 GW p.a.) and  wind (3 GW per annum), 50 per cent would be used to cater to external sales, while the rest would  be used for internal consumption. Apart from green H2, ANIL will also be  manufacturing value added products viz green ammonia (16.8 MTPA) and urea (8.4  MTPA) for which there is adequate requirement not only within the group but also  for exports,” Ventura said.

Ventura said the $50 billion capex plan is expected to be funded in the ratio of 70 per cent debt and 30 per cent  equity. Ventura said ANIL’s platform design can be utilised to execute similar projects in other renewable rich geographies of the Middle East, North Africa and Central America, while using the  existing spare capacity for manufacture of solar panels and wind turbine generators.

In the case of airport business, Ventura said the recovery in the passenger traffic above that of the pre-Covid levels augurs well for the  airports business. With focus on growing non-aero revenues and on streaming the Navi  Mumbai airport by December 2024 provides strong visibility for robust revenue growth and  profitability, it said.

“We expect value unlocking to take place with the introduction of a strategic  investor in the near term and to be listed in the medium term,” it said.

Ventura noted that ARTL is well on track to achieve 6,316 lane kms of road construction by FY25. With 3 road  projects having commenced toll collections and the Ganga Expressway achieving financial closure, fast tracking of toll revenues is on course, it said. The scrip fell 3 per cent to hit a low of Rs 3,528.65 in Wednesday’s trade.

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