Adani Enterprises' Airport Business To Be Key Growth Driver In Medium Term: Jefferies

Adani Enterprises Ltd.'s subsidiary, ANIL, is targeting to test the green hydrogen opportunity and its airport business will be the key growth driver over the medium term, according to Jefferies India Pvt.

The company has also denied the news of bribery charges, the brokerage said in a report after a meeting with the management.

"Four of the group's listed entities have certain specific SPVs or Group of SPVs that are issuers under US 144a, RegS or RegD and none of these issuers are aware of any charges or investigations from regulators," it said. "The other six of the portfolio companies have no jurisdictional connection with the U.S. either."

The brokerage maintains a 'buy' rating for the stock and a target price of Rs 3,168.10 apiece, implying a potential upside of 3.3%.

The company is targeting to install up to a 3-million-tonne capacity over the next decade. Jefferies said this targeted green hydrogen ecosystem would help control the price and the cost part of the business.

Over the next two–three years, the company targets to complete the manufacturing set up with integrated solar module, wind turbine and electrolyser facilities and also test the green hydrogen facility.

The ecosystem will be the most capital expenditure-heavy and profitable for Adani Enterprises.

This is on back of growth in air traffic, aero-tariff revisions at its select airports, growth in non-aero business, rollout of city-side projects contributions from the to-be-commissioned Navi Mumbai International Airport Ltd., according to Jefferies.

The company also targets to bid for new airports under the government's airport-privatisation plan, likely after the elections in the next financial year, Jeferries said. It is also rolling out significant artificial-intelligence initiatives at the airports. This will also support growth in the non-aero business and enhance customer experience and productivity.

Le Marché Duty Free, out of Mumbai Travel Retail Pvt., recently won concession for the operation of the duty-free business at Eurotunnel's French terminal in Coquelles, the brokerage said. "This duty-free in the international market is part of asset light-growth strategy in non-aero business."

Subsidiary Kutch Copper is setting up a greenfield copper refinery project copper with a 1-million-tonne-per-annum capacity in two phases, Jefferies said, citing the management. The phase I of the project has a capex outlay of $1.1 billion and a 500 kilo tonnes per annum of capacity is expected to come online by the end of this or next month.

In its data-centre business, the company's joint-venture plans to build centres across the country, starting with Chennai, Noida, Hyderabad, Navi Mumbai and Visakhapatnam, among others. "It has a target to have 1GW capacity over the next decade."

The company is targeting to provide up to 100% renewable-energy power to its data centres, offering a carbon-neutral solution to customers.

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