Foreign brokerage firm Bernstein has maintained a bullish stance on Adani Group companies, retaining ‘Outperform’ ratings on Adani Ports and Special Economic Zone and Adani Power, while remaining constructive on the group’s broader infrastructure positioning and execution capabilities.

Bernstein said Adani Ports continues to be one of its top picks within its coverage universe, citing strong pricing power, expansion opportunities across the logistics value chain, and competition largely from “government-run inefficient ports.”

“Adani Ports continues to be one our top picks in our coverage - where we think they have strong pricing power, room to expand in the value chain and primarily govt. run in-efficient ports to compete with,” it said in a report.

The brokerage has assigned a target price of ₹1,880 to the stock against the current market price of ₹1,772.6.

The brokerage has also retained an ‘Outperform’ rating on Adani Power with a target price of ₹177. It noted that while the stock has rallied sharply since initiation of coverage, the company continues to benefit from an effective “2-3 player market” where equipment availability remains a key bottleneck. Bernstein added that the relevance of coal-based power has increased amid the ongoing Middle East crisis.

On Ambuja Cements, Bernstein maintained a ‘Market-Perform’ rating despite valuation corrections, stating that operational performance continues to lag industry peers. The brokerage described cement as the group’s only major B2C-facing business where it has yet to match the scale of the market leader.

Meanwhile, Bernstein retained an ‘Underperform’ rating on Adani Green Energy, citing concerns over elevated valuations following the recent rally. However, it acknowledged that the company remains one of the biggest direct beneficiaries of recent developments in the US renewable energy landscape.

U.S. overhang largely behind the group

Bernstein said the billionaire Gautam Adani-led Adani Group has now moved beyond two major overhangs that dominated investor sentiment over the last four years - the January 2023 short-seller episode and the US SEC-Department of Justice developments that began in November 2024.

With the latest developments in the U.S., the brokerage believes both concerns are now largely behind the group. While several institutional investors stayed away from Adani stocks amid uncertainty around the US investigations, Bernstein noted that the group’s execution capabilities and infrastructure-building capacity were never seriously questioned.

The report added that many Adani stocks continue to remain under-owned despite a recovery in investor confidence.

Execution strength remains the biggest differentiator

According to Bernstein, one of the Adani Group’s biggest strengths lies in its ability to execute large-scale infrastructure projects efficiently and compete against government-run incumbents across sectors such as ports, thermal power, logistics, transmission, and renewable energy.

The brokerage said the group has built strong competitive advantages around access to large contiguous land parcels, integrated infrastructure, and rapid project execution.

In renewable energy, for instance, the group controls nearly 5 lakh acres of land with transmission connectivity, creating a significant entry barrier for competitors.

The report also highlighted the dominance of Adani Ports, which commands nearly 50% share in container traffic and competes largely with government-run ports and terminals.

Cash reserves nearly double; debt profile manageable

Bernstein said the Adani Group has nearly doubled its cash reserves over the past three years while maintaining a manageable debt repayment profile despite aggressive capital expenditure across businesses.

The group’s cash reserves rose from ₹18,600 crore in March 2023 to ₹35,400 crore in March 2026, reflecting stronger internal accruals and improving operational performance across core infrastructure businesses.

The report noted that debt repayment obligations remain comfortable, particularly for Adani Green Energy, the group’s most leveraged entity, with no significant near-term maturities creating pressure on liquidity.

Share pledge concerns ease; funding mix improves

Bernstein said concerns around pledged promoter shares  - a major issue during the short-seller crisis -  have eased considerably. Share pledges across group companies have fallen sharply since 2022 and are now largely negligible.

At the same time, promoters have infused additional capital into businesses such as Adani Green and Ambuja Cements through warrant issuances at prices broadly aligned with current market levels, signalling continued promoter confidence.

The report noted that group-level net debt has increased by around ₹1 lakh crore since September 2024, primarily due to capex-led expansion at Adani Enterprises and Adani Green. However, EBITDA growth remained strong, recording a 22% CAGR between FY23 and FY26, supported by capacity additions across power and renewable businesses.

As a result, the group’s net debt-to-EBITDA ratio, which had fallen to 2.7x during the US-related developments, rose to 3.9x as of March 2026. Even so, Bernstein said leverage levels remain below those seen during the 2023 short-seller episode, when the ratio stood at 4.4x.

The brokerage also highlighted a significant shift in the group’s funding mix over the years. Dependence on domestic banks declined sharply from 86% in FY16 to 15% in FY24, while bond financing increased from 14% to 31% during the same period.

Although overseas dollar fundraising slowed following the short-seller and US-related events, Bernstein expects access to international debt markets to improve again as legal and regulatory uncertainties recede. The report noted that the group has already revived plans to raise funds through US-listed dollar bonds.

 (DISCLAIMER: The views and opinions expressed by investment experts on fortuneindia.com are either their own or of their organisations, but not necessarily that of fortuneindia.com and its editorial team. Readers are advised to consult certified experts before taking investment decisions.)