Adani Group stock received a buy call for a 41% upside from a US-based brokerage firm and expects that the company’s Airports business may get demerged over the next five years.
According to CNBC, on January 29, the US-based brokerage firm, Cantor Fitzgerald, initiated coverage on Adani Enterprises Ltd. with an ‘overweight’ rating along with a target price of Rs. 4,368, representing a potential upside of 41 percent from the prevailing price of Wednesday at Rs. 3,093.90.
With a market cap of Rs. 3,53,200 crore, Adani Enterprises, the flagship company of the Adani Group, gained nearly 1.32 percent at Rs. 3,132.00 on Wednesday morning session compared to its previous close of Rs. 3,091.10.
Adani Enterprises Ltd is known for its execution of large-scale projects in the energy and infrastructure sectors in India and is recognised as India’s largest listed business incubator. The company focuses on four core sectors: energy and utility, transportation and logistics, consumer goods, and primary industry.
The company has delivered a positive return of more than 24.1 percent in the last six months, compared to nearly 4.1 percent in the last one year. So far in 2024, it has given around 6.13 percent returns.
In addition, the brokerage firm believes that, over the next five years, the Airports business will likely be demerged and calls Adani Enterprises a ‘publicly-trading incubator’.
Incorporated in 2019, Adani Airport Holdings Limited (AAHL) is a 100% subsidiary of Adani Enterprises Ltd. and owns eight airports, out of which seven are operational, and the Navi Mumbai International Airport is expected to be completed by the end of 2024.
AAHL holds 73 percent in Mumbai International Airport Ltd, which, in turn, holds 74 percent in Navi Mumbai International Airport Ltd.
With eight airports in the company’s management and development portfolio, AAHL is the largest airport infrastructure company in India, accounting for 25 percent of passenger footfalls and 33 percent of India’s air cargo traffic.
The brokerage firm expects the airport business to be the best-performing segment of the company over the coming five years and projects a valuation of Rs. 1,622 per share.
Besides the airport business, the US-based brokerage firm mentioned that their valuation is driven by two other major businesses of the Adani Group.
The first includes the road business for which the brokerage firm valued it at Rs. 1,525 per share, and the second consists of the solar, wind and electrolysers, which it valued at Rs. 1,511 per share.
Written by Shivani Singh
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