Adani Enterprises is a diverse and powerful company with a wide range of industries under its wing. Based in Ahmedabad, it is a leader in infrastructure like ports and roads, as well as in energy production and new-age businesses like data centers.
In 2023, the company became well-known due to a rapid rise and a controversial report by Hindenburg Research, which caused a big market reaction. Despite this, by May 24, 2024, Adani Enterprises had bounced back from all losses caused by the report. This shows their strong growth strategy and wealth creation for investors.
About Adani Enterprises
Adani Enterprises Ltd (AEL) is the main company of the Adani Group, one of India’s largest conglomerates, with interests in airports, data centers, defense, aerospace, edible oils, and agriculture.
The Adani Group includes several companies: Adani Green Energy, Adani Transmission, Adani Total Gas, Adani Power, Adani Ports, Adani Wilmar, ACC, and Ambuja Cements. These companies form the core of the Adani Group.
Adani Enterprises vs Sensex
If you had invested ₹100,000 in Adani Enterprises 5 years ago, it would be worth ₹2,159,319.5 today, a 2,060.3% return. In the same period, the Sensex has only gone up by 89%.
Since its stock market debut in 1999, Adani Enterprises’ stock has risen by over 55,784.3%. During the Hindenburg crisis in 2023, the stock fell to a low of ₹1,017.5 on February 3, 2024. However, loyal investors have seen a 3X return since then. Despite this recovery, the stock is still about 21% below its all-time high of ₹4,189.5, reached on December 21, 2022.
Why Did Adani Enterprises Perform Better?
Several key factors contributed to the company’s success:
- Brand Reputation: Being part of the Adani Group gives it a strong reputation and trust among customers.
- Diversification: The company has expanded into various sectors like solar energy, defense, and data centers, reducing reliance on a single industry and taking advantage of growth opportunities.
- Infrastructure Investments: Significant investments in airports and ports have strengthened its capabilities in India’s infrastructure sector.
- Strategic Alliances: Collaborations, such as the joint venture with EdgeConnex, have provided technological expertise and market access, enhancing its global presence.
Financial Performance
Over the past five years, Adani Enterprises has shown substantial growth. Its revenue CAGR is around 27.84%, and its net profit CAGR is approximately 59.33%. Although some of its ventures are still in the development stage with low or no profits, the company has managed to grow its overall profitability.
The company has taken on significant debt to invest in new growth areas like airports, cement, copper refining, green hydrogen, petrochemical refining, roads, and solar cell manufacturing but is actively working to reduce this debt.
Major Milestones
Adani Enterprises has achieved several key milestones in recent years:
- Launched Phase I of a terminal capable of serving 8 million passengers annually.
- Added 10 new routes, 7 new airlines, and 18 new flights in the March 2024 quarter.
- Commissioned a greenfield copper refinery project in Mundra.
- Inaugurated India’s first large-sized monocrystalline ingot and wafer unit with a 2 GW capacity.
What Next?
Adani Enterprises is looking at opportunities in the water treatment sector and is implementing various sewage and water treatment plants across India. It is also establishing capabilities in the defense sector, with an order book of around ₹80 billion.
The Adani Group has a joint venture with EdgeConneX to build data center facilities with a capacity of 1 GW over the next ten years. Additionally, the group plans to invest US$50 billion in green hydrogen and allied sectors over the next decade.
Conclusion
Adani Enterprises is expected to continue its strategy of expanding into new sectors. It may explore international opportunities, particularly in ports and renewable energy, potentially reaching a global stage. The group’s plans to reduce the cost of green hydrogen show its commitment to sustainability.
The Adani Group has set an ambitious target to achieve an EBITDA of ₹900 billion within the next 2-3 years.
For more information, you can check the fundamentals and valuations of Adani Group stocks on Equitymaster’s Indian stock screener.
Happy Investing!
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