Jefferies initiates ‘buy’ call on Adani Enterprises with ₹3,800 target price

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₹3800 per share. "We expect AEL's EBITDA to double from FY23 to FY26 and grow 3x+ by FY28. We build the contribution of new biz scaling from 40% of consol EBITDA (FY23) to -75% by FY26 and 85% by FY28, At CMP.

AEL is trading at 28x/22x FY25/FY26E EV/EBITDA We value AEL on SOTP basis at Rs3800, valuing all biz on EV/EBITDA," the firm said. Also read: Corporates likely to report 15% EPS growth in FY25; Steel sector to outshine, IT boasts high valuations The brokerage firm cited factors, while giving the tag, like track record as strong business incubator, 47% CAGR for Airport EBITDA over FY24-FY28E and balance sheet well-placed to take up rise in capex. Adani Airports commands a substantial 23% share of passenger traffic in India, overseeing operations at eight airports, including the soon-to-be-commissioned Navi Mumbai Airport (NMIAL), according to Jefferies.

Additionally, Adani Airports stands to benefit from its lucrative non-aeronautical ventures, positioning it as a proxy for consumer activity. Recent adjustments to aeronautical tariffs at select airports further enhance its growth prospects. Moreover, the implementation of city-side land development projects and the forthcoming contributions from the soon-to-be-commissioned MIAL Airport add to its promising outlook.

“With new businesses of Airport and Green Hydrogen, we expect EBITDA to grow ~3x over FY24-FY28. AEL is riding on the strong Industry tailwinds in New Energy/ sustainability, Airports, Infra, digitalisation, and import substitution in India," Jefferies said in its report. Moreover, the recent Supreme Court order had positive outcome in Adani group's year-long investigation related to short-seller report.