Shares of billionaire Gautam Adani-led Adani Enterprises (AEL) have been surging for the past two days after the group flagship company signed a pact with South Korean steel major POSCO to explore business cooperation opportunities, including setting up a green, environment-friendly integrated steel plant in Mundra, Gujarat. The largecap stock is trading at a premium compared to its average historical valuations and has risen 1.82% in the last two sessions.
Adani Enterprises, which operates in a diversified sector, has delivered strong returns to shareholders in the last one year, thanks to fundamentals and constant business expansion in fields such as renewable energy, logistics, data centers, and green hydrogen, among others.
Stock rises from ₹532 to ₹1,878 in one year
From ₹532 on January 14 last year, the stock price of Adani group company has spurted to ₹1,878 in intraday today, generating 253% return in the last 12 months. In comparison, the benchmark index BSE Sensex gained 23% during this period.
Investment of ₹1 lakh in Adani Enterprises stock at ₹532 on January 14, 2021 would have more than tripled to ₹3.53 lakh in just a year.
The multibagger stock has also given hefty returns to its shareholders on a long term basis by surging 1,154% in three years and 2,304% over the last five years. The stock grew 476% during the last ten years.
Within the Adani group, Adani Enterprises has outperformed most of its group companies in terms of one year return. The group’s firm Adani Power surged 43.4% in one year, Adani Ports and Special Economic Zone rose 46%, and Adani Green Energy grew 72% during the said period. However, gas distribution business Adani Total Gas and electric power transmission company Adani Transmission outperformed Adani Enterprises, with a stellar return of 400% and 348%, respectively, during the period under review.
Mcap crosses ₹2 lakh crore
The market capitalisation of Adani Enterprises crossed ₹2 lakh crore mark earlier this week as it added ₹1 lakh crore in just ten months. The company had first crossed a market cap of ₹1 lakh crore on March 3, 2021, while it breached ₹1 lakh crore on January 11, 2022.
Adani Enterprises is the fourth Adani group company to achieve this milestone. Earlier, Adani Green Energy (₹2.6 lakh crore), Adani Transmission (₹2.18 lakh crore), and Adani Total Gas (₹1.96 lakh crore), had crossed this mark. Adani Total Gas's market cap has dropped below ₹2 lakh crore to quote at ₹1.97 lakh crore on Friday, with share price dropping by 1.7% to ₹1,791 apiece on the BSE.
On Friday, Adani Enterprises shares opened higher and gained as much as 1.26% to hit an intraday high of ₹1,877.40, against previous close price of ₹1,853.95. The stock traded marginally lower than its 52-week high of ₹1,883 touched on January 12, 2022. It hit a 52-week low of ₹497.90 on February 1, 2021.
Posts weak earnings in Sep'21 after 3 consecutive positive quarters
Formed in 1993, the Ahmedabad-headquartered firm reported a 55.3% drop in consolidated profit at ₹194.54 crore for the second quarter ended September 30, 2021, compared to ₹435.73 crore in the year-ago period. However, consolidated total income rose to ₹13,597.10 crore over ₹9,312.14 crore in the year-ago period.
For the year ended March 31, 2021, the Adani group’s flagship company posted a 18.9% fall in consolidated net profit to ₹922.64 crore as compared to previous fiscal. The revenue from operations dipped 8.9% to ₹39,537.13 crore in FY21, over the year ended March 31, 2020.
Adani Enterprises has a diversified business portfolio which includes solar cell and module manufacturing, agro-processing (including sale of branded edible oil), commodities trading, bunkering (fueling) of ships, and shipping. The company, through its subsidiaries, has also invested in coal mining and related rail evacuation infrastructure in Australia and is currently incubating new businesses like airports, road development, water treatment plants, data centers, among others.