Adani Enterprises snaps 3-day losing streak post Q2; here’s why

Shares of Adani Enterprises rose over 1% in early trade on Friday to snap a three-day losing streak as investors digested its second quarter earnings results. The rise in the share price of the flagship company of Adani Group can be attributed to value-buying at lower levels in tandem with a positive trend in the equity market.

Ending three sessions losing streak, Adani Enterprises shares opened marginally higher at ₹2,215 against the previous closing price of ₹2,214.90 on the BSE. In the early trade so far, the conglomerate’s shares gained as much as 1.3% to ₹2,246, while the market capitalisation rose to ₹2.55 lakh crore.

At the current level, the shares of Adani Enterprises are down 46% from the 52-week high of ₹4,189.55 touched on December 21, 2022. However, the stock has more than doubled against its 52-week low of ₹1,017.10 touched on February 3, 2023, triggered by an adverse report released by the U.S.-based short-seller Hindenburg Research on January 24 this year.

In the calendar year 2023, Adani Enterprises shares have fallen over 41%, while it has lost 37% in market value in the last 12 months. The counter, however, gained over 22% in the past six months despite shedding over 5% in the last one month.

For the second quarter ended September 30, 2023, Adani Enterprises reported 50.57% year-on-year (YoY) decline in its consolidated net profit attributable to owners at ₹227.82 crore compared with ₹460.94 crore in the corresponding quarter last year.

The consolidated revenue from operations declined 41% YoY to ₹22,517.33 crore in Q2 FY24, from ₹38,175.23 crore in the same quarter last year.

The consolidated EBITDA, however, rose 39% to ₹2,979 crore from ₹2,136 crore in the same quarter last year, aided by strong incubating businesses.

The total debt of Adani Enterprises stood at ₹42,102 crore as of September 30, 2023, from ₹38,320 crore as on March 31, 2023. The gross debt includes founder's debt of ₹9,378 and net external debt of ₹32,724 crore.

Adani Enterprises, in its earnings report, says the company has made “significant progress in its strong incubation pipeline” during the first half of the fiscal year 2023-24. “The company's latest results showcase the emergence of key incubating businesses, including green hydrogen integrated manufacturing ecosystem, airports and roads, which collectively contributed 48% of the overall EBITDA,” it says in an exchange filing.

Gautam Adani, Chairman of the Adani Group, says, “We are fundamentally reshaping the essence of incubation scale and velocity.”

“Adani Enterprises covers sectors that span energy, utility, transport, D2C, and primary industries. With many ventures now market-ready and thriving, our H1 FY23-24 results have been boosted by the core infra incubating businesses, thereby being a strong testament to our incubating ventures,” he adds.

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