Adani Group's profit drops 11% in March quarter; here's what analysts say on Adani stocks
Adani Group’s profit drops 11% in March quarter; here’s what analysts say on Adani stocks
The combined net profit of billionaire Gautam Adani-led Adani Group declined 11% year-on-year (YoY) in the March quarter of financial year 2023-24 (Q4FY24). The 10 listed companies together reported a consolidated net profit of Rs 8,055 crore in Q4 against Rs 9,093 crore in the same quarter last year. Adani Group’s net profit growth stood at nearly 17% YoY in Q4FY23.
The latest quarterly results showed that the drag in the bottom line of Adani Enterprises, Adani Green Energy, Adani Power and Adani Energy Solutions weighed on the overall numbers. The consolidated net profit of Adani Enterprises declined 38% YoY to Rs 450.58 crore in Q4FY24 on nearly 1% revenue growth at Rs 29,180.02 crore. The net profit of the flagship company was hit by an expense of Rs 627.4 crore pertaining to the Mumbai International Airport.
The consolidated net profit of Adani Green Energy, Adani Power and Adani Energy Solutions fell 70%, 48% and 7% on a YoY basis. On the other hand, the net loss of New Delhi Television Ltd (NDTV) narrowed to Rs 8.46 crore against a net loss of Rs 12.03 crore for the corresponding quarter ended March 2023.
Other Adani Group firms posted a growth in their net profit figures. Cement majors ACC and Ambuja Cements reported a 301% (to Rs 944.79 crore) and 64% YoY (to Rs 1,055.16 crore) rise in net profit in Q4FY24. Axis Securities has a ‘Buy’ call on ACC with a target price of Rs 2,900. “The outlook for the cement industry remains positive based on higher budgetary allocation to infrastructure and construction and the government’s push for affordable housing along with green energy transition, demand-supply dynamics, and greater consolidation. Adani Cement will indeed have the advantage of accelerated growth, lower costs, and group synergies, which, in turn, will contribute to sustainable performance and market leadership,” Axis Securities said.
On the other hand, Antique Stock Broking has a ‘Buy’ rating on Ambuja Cements with a target price of Rs 700. “We factor 12% consolidated volume CAGR over FY24-26 and expect EBITDA/tonne to inch up from Rs 1,082/tonne in FY24 to Rs 1,213 by FY25 and Rs 1,304 by FY26 led by improved cost efficiencies. We maintain a ‘Buy’ rating on Ambuja Cements with an unchanged target price based on 17 times consolidated FY26 EV/EBITDA,” Antique Stock Broking said.
The data further highlighted that the consolidated net profit of Adani Ports and Special Economic Zone (APSEZ) increased by 76% YoY to Rs 2,039.66 crore. Brokerage Motilal Oswal Financial Services is positive on Adani Ports with a target price of Rs 1,550. Shares of the company traded at Rs 1,323 intraday on May 3.
“The Q4 performance was largely in line with our estimates. APSEZ is expected to record 2-3 times India’s cargo volume growth, driven by a balanced port mix on the western and eastern coastlines of India and an operational ramp-up at the recently acquired ports. Further, the logistics business will also serve as a value addition to the domestic ports business with a focus on enhancing last-mile connectivity. We expect APSEZ to report 11% growth in cargo volumes over FY24-26. This would drive a CAGR of 14%, 15% and 19% in revenue, EBITDA and PAT over FY24-26,” Motilal Oswal Financial Services said.
Adani Total Gas and Adani Wilmar posted a 72% and 67% rise in consolidated net profit during the quarter under review. Nuvama Institutional Equities has set a target price of Rs 455 for Adani Wilmar (AWL). Shares of the FMCG firm traded at Rs 345 in the afternoon trade on Friday.
“In branded rice, AWL has plans to enlarge its retail base from 65,000–70,000 presently to 125,000 (79% YoY). In edible oil, the standard run rate of gross profit is Rs 11,500–12,000/MT, and an EBITDA margin of close to Rs 3,500/MT. AWL does have some bit of gains sitting in the inventory and some M2M gains sitting in the contracts, which shall be settled only when these deliveries happen in the next quarter. AWL believes that by the time it crosses 1.5 million tonnes in food, it should have pricing power in hand, which can result in better margins than the edible oil,” Nuvama said.
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