Adani group stocks surge up to 6% a day after Lok Sabha election results

During the previous session, all 10 Adani group companies witnessed declines as investors reacted to the Lok Sabha election results with disappointment. Adani Ports notably experienced a steep decline of 20% on Tuesday. Shares of Ambuja Cements, Adani Enterprises, Adani Energy Solutions, Adani Green, NDTV, ACC, Adani Total Gas, and Adani Gas fell between 12% and 18%, collectively leading to a market capitalization loss of around Rs 3 lakh crore for all 10 Adani stocks.

On Monday, however, Adani were among the top gainers as exit polls predicted that PM Narendra Modi would win the elections with a thumping majority, going well above 350 seats. Following the rally, Adani stocks erased all Hindenburg-era losses, with their market capitalization nearing the Rs 20 lakh crore mark once again after a gap of 16 months.

In FY24, Adani Group's (PAT) jumped 55% to Rs 30,768 crore, while its EBITDA grew 40% year-on-year to Rs 660 billion.

At the end of FY24, the group's net debt remained stable at Rs 2.2 compared to Rs 2.3 trillion in the previous year. Net debt/EBITDA improved materially to 3.3x FY24 EBITDA vs. 5x YoY. Adani Ports and Adani Power saw a drop in net debt in FY24. An increase in leverage for Adani Enterprises and Adani Green was due to new capex projects undertaken by the companies, according to Jefferies.

The global brokerage has buy calls on Adani Enterprises (target price Rs 3,800), Adani Ports (target price Rs 1,640), and Adani Energy Solutions (target price Rs 1,365).

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