Shares of Adani Group’s flagship firm Adani Enterprises emerged as the top gainers in the Nifty 50 on Monday.
The stock surged up over 5% to hit an intraday high of ₹2,536.70.
With this surge, the stock looks to extend its gaining streak to the fourth straight session.
The stock has had a tough year. Adani Ent’s share price has gone down around 13% on a year-to-date basis.
Why Adani Ent’s share price is surging today
The surge in the stock comes as brokerage firm Ventura maintained its “buy” rating on the stock.
The brokerage has a 24-month price target of ₹3,801 on the Adani Group stock.
The target indicates an around 58% upside from the stock’s last closing price of ₹2,409.
Ventura highlights Adani Enterprises as a key player diversifying into green hydrogen (H2) and its ecosystem to drive future growth.
Adani Ent: keys to success
The brokerage noted that despite stock volatility following the US Department of Justice (US-DOJ) notice in November 2024, AEL has demonstrated resilience, supported by strong operational fundamentals in FY25. Key developments include:
For FY24-27E, AEL’s consolidated revenue, EBITDA, and net earnings are expected to grow at a CAGR of 17.5%, 37.5%, and 45.8%, reaching ₹1.56 trillion, ₹285.63 billion, and ₹92.45 billion, respectively.
EBITDA and net margins are projected to expand by 647bps to 18.3% and 255bps to 5.9%.
Growth in airports, solar/WTG businesses, and copper revenue are expected to boost financial performance and profit margins, leading to improved return ratios (RoE and RoIC).
AEL plans to invest ₹6.5-7.0 trillion over the next decade for expansion into airports, data centers, copper, and green hydrogen.
This expansion will be primarily funded through debt, which will increase net debt-to-equity and net debt-to-EBITDA from 1.2x/1.7x in FY24 to 1.8x/2.2x by FY27E.
The company raised ₹42 billion in Q2FY25 via QIP, alongside ₹8 billion through its first-ever public issuance of NCDs.
The airport business also secured ₹19.50 billion, and the road business raised ₹11.24 billion through NCD issuances.
Adani Ent: bull and bear scenarios
Ventura has outlined potential Bull and Bear case scenarios for Adani Enterprises for the FY27 price target, based on revenue growth, EBITDA margins, and EV/EBITDA multiples.
- Bull case: In this scenario, Ventura assumes a revenue of ₹1.66 trillion (FY24-27E CAGR of 20%) and an EBITDA margin of 20%, with an EV/EBITDA multiple of 23.4X.
This leads to a Bull case price target of ₹5,748, reflecting an upside of 138.6% from the current market price (CMP). - Bear case: For the Bear case, Ventura projects revenue of ₹1.28 trillion (FY24-27E CAGR of 10%) and an EBITDA margin of 15%, applying an EV/EBITDA multiple of 19.1X.
This results in a Bear case price target of INR 2,179, indicating a downside of 9.5% from the CMP.
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