Gautam Adani implements plan to increase Group valuation to $1 trillion

Gautam Adani implements plan to increase Group valuation to $1 trillion

On September 16, billionaire Gautam Adani’s Adani group surpassed Tata group’s market capitalization to become the most valuable in the country. On September 16, the cumulative market valuation of the seven-listed Adani group of companies was Rs 20.86 lakh crore, according to data.

The total market capitalization of the listed Tata group of companies, on the other hand, was Rs 20.72 lakh crore. Meanwhile, the benchmark BSE Sensex fell 1093.22 points, or 1.82 percent, to 58,840.79.

Details about Gautam Adani implements plan to increase Group valuation to $1 trillion

According to market observers, the Adani group of companies, which are entirely focused on India, benefited from a favorable business environment. Adani Total Gas shares have risen 1,618 percent in the last two years as the company’s momentum continues. Adani Transmission (up 1438%) and Adani Enterprises (up 1438%) followed (up 1,197 per cent).

Other Adani Group companies, such as Adani Power, Adani Green Energy, and Adani Ports and Special Economic Zone, also rose 953 percent, 246 percent, and 167% during the same time period. Adani Wilmar, which went public in February 2022, is also up more than 100% from its initial public offering price of Rs 230.

“Macroeconomic environment for the businesses in which Adani group of firms are quite positive in the country,” said Kranthi Bathini, Equity Strategist, WealthMills Securities. In addition, the group is developing expansion plans, and the ways they are leveraging the business are assisting them in emerging as the largest business model.”

On the other hand, one of the major concerns among investors is the Adani Group’s exorbitant valuations. On September 15, Adani Total Gas’s price-to-earnings (P/E) ratio was around 786.86. Other group companies, such as Adani Enterprises and Adani Wilmar, had ratios of 471.29 times and 117.49 times, respectively. 

Bathini said of valuations, “Valuations can be sustainable given the favorable business environment.” Nikhil Gangil, Founder of Intrinsic Value, on the other hand, stated, “As a conservative investor, I would prefer to avoid Adani stocks at the current valuation.”

The consolidated profit of all listed Adani group firms increased by nearly 155% year on year (YoY) to Rs 6,897.85 crore in the most recent quarter ended June 30, 2022. In the same quarter last year, the figure was Rs 2,705.84 crore. Cumulative sales of the group firms, on the other hand, increased by 102% to Rs 79,769.97 crore during the quarter under review.

Adani Power, one of the top performers, reported a 1,618 percent growth in the bottom line in Q1FY23 on 109 percent growth in net sales. Adani Enterprises and Adani Wilmar’s net profits increased by 109% and 19%, respectively, during the same period. Adani Transmission, Adani Ports, Adani Green Energy, and Adani Total Gas, on the other hand, saw their net profits fall by 61 percent, 22.60 percent, 0.90 percent, and 0.40 percent, respectively, year on year.

“Focus on license-related utility businesses such as gas, power, transmission, and current events that have put conservative energy like coal in focus have undoubtedly helped,” Gangil said.

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