Adani Group posts mixed Q1 results. See what analysts say

Billionaire Gautam Adani-led Adani Group, which came under the spotlight following the latest report by US short-seller Hindenberg Research, posted mixed results for the quarter ended June 30 (Q1FY25). While Adani Enterprises’ net profit rose 116% to Rs 1,454.50 crore in Q1FY25, Adani Green Energy reported a 39% jump in net profit to Rs 446 crore in the quarter under review. On a year-on-year basis, shares of Adani Enterprises and Adani Green Energy have gained 10% till August 12.

On the other hand, Adani Energy Solutions reported a loss of Rs 823.92 crore in the quarter under review. In the same quarter last year (Q1FY24), it had posted a profit of Rs 175.06 crore.

Adani Power reported a 55% year-on-year (YoY) decline in net profit at Rs 3,912.79 crore, while Ambuja Cements’ net profit fell nearly 29% YoY to Rs 646.31 crore in the quarter under review. ACC reported a 22.47% decline in net profit at Rs 361.36 crore for the quarter ended June 30 as against Rs 466.10 crore in the same quarter last year.

Shares of Adani Energy Solutions are up just 2% YoY. Adani Power, Ambuja Cements and ACC are up 30%, 22% and 5% YTD, respectively. Motilal Oswal Financial Services is positive on ACC with a target price of Rs 3,300. The stock was trading at Rs 2,320 in afternoon trade on August 12.

“ACC’s Q1FY25 results were below our estimates, primarily due to lower than estimated realisation. Cement prices are expected to remain under pressure in the near term due to monsoons. However, there has been a steady improvement in opex/t, driven by various cost reduction initiatives. Expected improvement in profitability, driven by cost-saving initiatives, strong brand positioning and structural changes in operations, will lead to a re-rating of the stock,” the broker said.

On the other hand, Emkay Global Financial Services is bullish on Ambuja Cements, with a target price of Rs 750. “Based on cost-cutting initiatives and growth visibility, we are raising our target multiple to 20x (from 18x earlier),” Emkay Global Financial Services said in a report.

NDTV’s net loss widened to Rs 46.75 crore as against a loss of Rs 8.13 crore in the same period. Adani Wilmar posted a profit of Rs 313.20 crore in Q1FY25 as against a loss of Rs 78.92 crore in the same quarter last year. NDTV shares are down nearly 23% YTD, while Adani Wilmar has gained 5% during the same period.

Adani Ports and Special Economic Zone (APSEZ) reported a 47% rise in net profit at Rs 3,112.83 crore in the quarter under review. Adani Total Gas reported a 14% rise in net profit at Rs 171.84 crore in Q1FY25. Shares of Adani Ports are up 47% in FY24. On the other hand, Adani Total Gas has retreated almost 16% in the same period. Motilal Oswal is also positive on Adani Ports with a target price of Rs 1,790.

“APSEZ aims to become India’s largest integrated shipping company and the world’s largest private port company by 2030. The company has a diversified cargo mix and aims to increase the cargo share of its east coast ports. We expect APSEZ to register an 11% growth in cargo volumes during FY2024-26. This would increase its revenue, EBITDA, PAT CAGR by 14%, 15% and 19% respectively during FY2024-26,” Motilal Oswal Financial Services said in a report.

Shares of Adani Group companies came under pressure after Hindenburg Research suggested alleged links between Sebi chairwoman Madhabi Puri Buch and her husband Dhaval Buch with an offshore fund linked to Adani Group. While Adani Group, markets regulator Sebi and Buch issued clarifications, Adani shares fell in a knee-jerk reaction to Hindenburg’s fresh allegations.

Kranthi Bathini, equity strategist at WealthMills Securities, said, “Stock prices are slaves to earnings. I would be more worried if the Hindenburg report had raised issues that could affect Adani Group’s earnings.”On the other hand, Vinit Bolinjkar of Ventura Securities does not see Hindenburg’s allegations as serious.

The combined consolidated net profit of the 10 listed companies of Adani Group declined 29% year-on-year to Rs 9,548.16 crore in Q1FY25 as against Rs 13,480.01 crore in the corresponding quarter last year.