Adani surge helps indices break losing streak on eve of exit polls

The Sensex gained 0.1% and the Nifty rose 0.2% at the close after a rollercoaster ride as await on Saturday evening after the last phase of the election ends. Indices had dropped for five trading sessions in a row before this amid the uncertainty. Votes in India's general election will be counted on June 4.

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The broader too ended firm with the NSE Mid-cap 150 index gaining 0.6% and the Small-cap 250 index advancing 0.5%. Of the 3,915 shares traded on the BSE, 2,099 declined and 1,732 advanced. The Volatility Index - the market's - inched up 1.8% to 24.6, extending its recent upmove that underscores the nervousness among traders about poll results.

In the past month, VIX has soared almost 90%.

Foreign portfolio investors bought shares to the tune of ₹1,613 crore on Friday, snapping their recent selling spree.

Brokers said the purchases were on account of MSCI's quarterly rebalancing. The index rejig announced on May 15 came into effect on May 31.

It involves the addition of 13 and the removal of three from the MSCI Global Standard Index, resultsing in net flows of $2 billion.

Jefferies said the total Adani Group (earnings before interest taxes depreciation and amortisation) - a measure of a company's operating performance - grew 40% in FY24 from a year ago, while the promoters increased stakes in companies and group market capitalisation rebounded after the slump in 2023.

Shares of Adani Group companies took a pounding after an adverse report by US-based short-seller Hindenburg on January 25, 2023, alleging accounting fraud and stock price manipulation. The group's market cap, which was ₹19.5 lakh crore before the release of the Hindenburg note on January 25, fell ₹12.5 lakh crore by the first week of February.

The group's market cap has recovered more than ₹11 lakh crore since then to ₹18 lakh crore on Friday. The Adani group has rejected the Hindenburg report's contentions.

"During FY24, the group focused on containing debt and reducing founders' share pledges," said Jefferies.

"Leverage ratio improved to multi-year low at group level: Net debt at the group level companies + debt related to cement business adjusted remained stable at₹2.2 trillion in FY24 vs ₹2.3 trillion."

Jefferies has set a target of ₹3,800 for Adani Enterprises, which is 12% above the current level. Similarly, Adani Ports and Adani Energy have been given targets of ₹1,640 and ₹1,365, respectively, as against their share prices of ₹1,437.70 and ₹1,122.80 at the close on Friday. Ambuja Cement is valued at ₹735 per share against its Friday closing price of ₹634.30.

Except for Adani Total Gas, Adani Energy and Adani Wilmar, all group stocks have recovered from the crash triggered by the Hindenburg report. Adani Power shares have rallied 175% since January 24, 2023, while Adani Ports gained more than 88% during this period.

The Adani Group's promoters increased their stakes in two listed entities - Adani Enterprises and Adani Green Energy - in May, pumping in more than ₹4,700 crore.

According to the Jefferies report, Ebitda growth for Adani Group companies ranged from 16% to 33%, with the exception of Adani Wilmar, which saw a year-on-year decline.

Adani Ports and Adani Power experienced a reduction in net debt in FY24.

However, the increase in leverage for Adani Enterprises and Adani Green was attributed to new capital expenditure projects undertaken by these companies.