Adani Enterprises' New Ventures Now Drive 60% Of Operating Profit, Says Jefferies

Adani Enterprises is well-positioned to leverage industry tailwinds by incubating new businesses and these new ventures are now responsible for 60% of Adani Enterprises' operating profit said brokerage firm Jefferies. The brokerage has maintained a 'buy' rating for the stock.

The firm anticipates that this trend of gradual value unlocking will continue, contributing to positive growth prospects for the company in the coming years.

In the same line, Jefferies has issued a bullish commentary on Adani Enterprises, maintaining a target price of Rs 3,800 per share, which is 18.1% upside from Thursday's closing price.

Adani Enterprises reported a 49% increase in operating profit for its first quarter performance, primarily fueled by robust growth in its new energy and airport businesses.

The optimistic outlook from Jefferies is driven by strong performance indicators and strategic growth in key sectors for the company.

The new energy sector and airport operations have been standout performers, with Ebitda in these segments growing four and a half times year-on-year, and the airport business alone seeing a 33% increase in Ebitda.

The recent announcements of demergers, including Adani Wilmar and the new energy business, align with this positive outlook and are expected to enhance the company's strategic focus and operational efficiency.

However, Jefferies notes that Adani Enterprises has experienced a rise in net debt, which increased from Rs 41,600 crore in Q4 FY24 to Rs 50,200 crore by the end of Q1 FY25. This increase is attributed to an ambitious Rs 80,000 crore capital expenditure plan for FY25.

Despite the ballooning debt, Jefferies maintains that the capital expenditure is a positive indicator of growth and expansion, reinforcing their constructive view on the company's future performance.

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