Jefferies issues a ‘buy’ call with a target price of ₹3,800 for Adani Enterprises

On Tuesday, the brokerage firm Jefferies launched a “Buy” call with a target price of ₹3800 per share for the Gautam Adani-led conglomerate Adani Enterprise (AEL).

“We expect AEL’s EBITDA to double from FY23 to FY26 and grow 3x+ by FY28. We build the contribution of new biz scaling from 40% of consol EBITDA (FY23) to -75% by FY26 and 85% by FY28, At CMP. AEL is trading at 28x/22x FY25/FY26E EV/EBITDA We value AEL on SOTP basis at Rs3800, valuing all biz on EV/EBITDA,” the firm stated.

The brokerage firm gave the tag based on a number of considerations, including its track record as a strong business incubator, the airport’s 47% CAGR in EBITDA from FY24 to FY28E, and its balance sheet’s ability to absorb an increase in capital expenditure.

According to Jefferies, Adani Airports manages eight airports, including the soon-to-be-commissioned Navi Mumbai Airport (NMIAL), and commands a significant 23% share of passenger traffic in India. Furthermore, its profitable non-aeronautical endeavors will help Adani Airports promote itself as a stand-in for consumer activity.

“With new businesses of Airport and Green Hydrogen, we expect EBITDA to grow ~3x over FY24-FY28. AEL is riding on the strong Industry tailwinds in New Energy/ sustainability, Airports, Infra, digitalisation, and import substitution in India,” Jefferies mentioned in its report.

Adani Green Energy Limited (AGEL), Adani Green Energy Restricted Group (AGEL RG-1), Adani Transmission Step-One Limited (ATSOL), and Adani Electricity Mumbai Limited (AEML) are among the firms whose rating outlooks have been updated.

On Tuesday, February 13, Adani Enterprises’ shares closed higher at ₹3,180 a share. In the past six months, the scrip has increased by over 29.48 percent, and in the past year, it has increased by 81.75 percent.