Tata group creates more wealth for investors than Ambani, Adani in 2023

27/12/2023

Tata group managed to create humongous wealth for their investors in 2023 as indicated by an over 30 per cent rise in the group’s market capitalisation on a year-to-date basis till December 26. On the other hand, billionaire Mukesh Ambani-led Reliance witnessed 1.51 per cent growth in market valuation and Gautam Adani-led Adani Group saw a 28 per cent erosion in its market capitalisation due to Hindenburg report.

Tata group

The m-cap of Tata’s 28 listed entities soared to Rs 27.61 lakh crore as on December 26, 2023 as against Rs 21.04 lakh crore as on December 30, 2022. In terms of percentage, the market valuation of Benaras Hotels, Artson Engineering and Trent grew over 100 per cent YTD. In absolute terms, market capitalisation of IT major Tata Consultancy Services jumped by Rs 1.8 lakh crore to Rs 13.73 lakh crore from Rs 11.93 lakh crore during the same period.

Market valuation of Tata Motors, Titan Company and Trent also increased by Rs 1.10 lakh crore, Rs 0.94 lakh crore and Rs 0.58 lakh crore, respectively. With a dip of 2.6 per cent, or Rs 467.26 crore, Tata Teleservices (Maharashtra) emerged as the sole loser in the Tata group pack regarding growth in market capitalisation (m-cap). Meanwhile, Tata Technologies, a recently-listed firm from the Tata group, also delivered solid returns to investors. Shares of Tata Technologies traded over 140 per cent higher at Rs 1,202.95 on December 26, 2023 as compared to the issue price of Rs 500. The company got listed on bourses on November 30, 2023.

Tata Power and Tata Steel also witnessed a rise of 57 per cent and 21 per cent growth in their m-cap, respectively, during the year. YES Securities is bullish on Tata Steel with a price target of Rs 153. “The Indian steel sector has been growing steadily throughout the CY23 and is expected to showcase a similar growth story for the upcoming years. Tata Steel is set to play a vital role in capturing the upcoming growth in the Indian steel demand. On the back of the company’s solid financial performance is the ability to time its capex cycles and not let the debt hinder the company’s growth plans. With raw material prices showing no signs of easing down, the company’s reliance on being backward integrated has certainly remained useful,” YES Securities said in a report.

Mukesh Ambani’s Reliance

The combined market valuation of seven-listed entities of Mukesh Ambani-led Reliance increased to Rs 17.69 lakh crore in 2023 as against Rs 17.42 lakh crore a year ago. Market valuation of energy-to-telecom behemoth Reliance Industries grew by 1.15 per cent to Rs 17.44 lakh crore on December 26. Other group companies such as Den Network, Reliance Industrial Infrastructure, Just Dial and Hathway Cable & Datacom also saw a rise of 60 per cent, 43 per cent, 33 per cent and 27 per cent, respectively, growth in their respective market valuation so far in 2023.

Going ahead, brokerages are bullish on Reliance Industries (RIL). Jefferies, in its research report on December 5, said that RIL underperformed the Nifty in CY23 and trades at a discount to its 5-year average forward EBITDA. “We see tariff hike, faster broadband sub growth and lower capex in Jio as well as retail in FY25. Current market price imputes little value to renewables (Rs 351 per share),” Jefferies said while maintaining a ‘Buy’ rating on RIL with a price target of Rs 2,990 (earlier Rs 3,000).

Adani Group

The combined market valuation of Adani Group companies, which took a hit due to the scathing Hindenburg Research report in January 2023, was at Rs 14.15 lakh crore on December 26, 2023 as against Rs 19.66 lakh crore on December 30, 2022. Despite the headwinds, the market valuation of Adani Power jumped by 71 per cent to Rs 1.98 lakh crore from Rs 1.15 lakh crore during the same period. M-cap of Adani Ports increased by 26 per cent to Rs 2.22 lakh crore.

On the other hand, Adani Enterprises, the group’s flagship entity, saw a 26 per cent YTD erosion in its market valuation at Rs 3.27 lakh crore. Adani Total Gas, Adani Energy Solutions, Adani Wilmar, NDTV, Adani Green Energy, ACC and Ambuja Cements also witnessed a drop of somewhere between 4 per cent and 73 per cent in their market valuation in 2023.

Brokerages are positive on a couple of Adani stocks. Jefferies has a ‘Buy’ rating on Adani Energy Solutions with a price target of Rs 1,300. On the other hand, Motilal Oswal Financial Services has a ‘Buy’ call on Adani Ports & SEZ (APSEZ) with a target price of Rs 1,210. Shares of Adani Energy Solutions and Adani Ports traded at Rs 1,041 and Rs 1,028, respectively, on December 26.

“We expect APSEZ to register 16 per cent volume growth over FY23-25 and revenue, EBITDA and PAT CAGR of 23 per cent, 21 per cent and 17 per cent, respectively, over the same period.” Motilal Oswal Financial Services said.

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