Mumbai, Dec 28 Leading brokerage Ventura Securities Ltd has set a bullish target of Rs 3,801 for Adani Enterprises Ltd's (AEL) stock, which is a potential upside of 57.8 per cent over the next 24 months.
The share of Adani Group's flagship company is currently trading at Rs 2,409 apiece.
In a bull case scenario, the target price rises to Rs 5,748, which would mark an upside of 138.6 per cent, the brokerage said in its note.
“We have assumed revenue of Rs 1,66,615 crore (FY24-27E CAGR of 20 per cent) and an EBITDA margin of 20 per cent at an EV/EBITDA of 23.4X, which will result in a bull case price target of Rs 5,748," said the brokerage.
Adani Enterprises is on a strong growth trajectory, as per the note by Ventura. Over fiscal years 2024 to 2027, its consolidated revenue is expected to grow at a compounded annual growth rate of 17.5 per cent to Rs 1.56 lakh crore.
"EBITDA and net margins are projected to expand by 647 basis points to 18.3 per cent and 255 bps to 5.9 per cent, respectively," it said, adding that "return ratios – RoE and RoIC – are expected to improve by 563 bps to 14.5 per cent and 99 bps to 11.3 per cent, respectively".
According to the note, this growth will be driven by the company’s expansion of airport, solar, and wind turbine businesses, as well as revenue contributions from copper business.
The Adani Group’s flagship company is targeting Rs 6.5-7 lakh crore in capital expenditure over the next decade, primarily focusing on airports, data centres, copper, and green hydrogen, Ventura said.
"This expansion will be funded through debt, which is expected to lead to an increase in the company's debt-to-equity and debt-to-EBITDA ratios over the next few years," it added.
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