Down up to 71% since Hindenburg report: Which beaten-down Adani stock to buy post Q3 results
Analysts on Dalal Street retained their mixed views on the publicly-listed Adani group of companies post Q3 results, citing valuation concerns despite up to 71 per cent drop in the 10-listed stocks since the Hindenburg Research report. Data showed that Adani groupтАЩs flagship company Adani Enterprises reported a profit of Rs 820.06 crore for the quarter ended December 31, 2022 against a loss of Rs 11.63 crore in the same quarter last year.
On the other hand, the bottom line figure of Adani Green Energy surged 110.20 per cent to Rs 103 crore in Q3FY23 over Rs 49 crore in Q3FY22. Gross sales of the company increased by 49 per cent to Rs 1959 crore from Rs 1391 crore during the same period.
While sharing his view on Adani group of stocks, independent market analyst Ambareesh Baliga said, тАЬI would not give too much weightage to Q3 earnings of Adani group because this is the past. This is before that event. The biggest issue the group would be facing now and going forward would be fundraising. Growth will now depend on fundraising and I think it will be postponed for at least by 18-24 months. There is no doubt that all businesses are in a sweet spot. Most sectors should do extremely well.тАЭ
Shares of Adani Enterprises and Adani Green Energy have plunged 49 per cent and 66 per cent since January 24, 2023 when a report by Hindenburg Research claiming that the Indian giant had engaged in stock manipulation and accounting fraud scheme over the course of the last few decades.
Other Adani group firms including Adani Transmission, Adani Total Gas and Adani Wilmar reported net profit growth of 77.80 per cent, 17.70 per cent and 16.40 per cent, respectively, during the quarter under review. Shares of Adani Transmission, Adani Total Gas and Adani Wilmar have slipped 61 per cent, 71 per cent and 31 per cent, respectively, since January 24.
The consolidated net profit of Adani Power declined the most 96 per cent to Rs 8.77 crore in Q3FY23 over Rs 218.49 crore in Q3FY22. Likewise, the figure for Adani Ports also dipped 16 per cent YoY during the same period. The scrip retreated 46 per cent so far after the Hindenburg Research report.
Brokerage Centrum Broking is positive on Adani Ports with a target price of Rs 900, indicating an upside of over 50 per cent from the current market price of Rs 570. тАЬIn the backdrop of the recent adverse news flow involving the Adani Group and concerns on the groupтАЩs leverage, Adani Ports has put additional emphasis on its deтАРleveraging plans. Adani PortsтАЩ portfolio comprises robust cash-generating assets with scalable infrastructure and long concession periods,тАЭ Centrum said.
Recently acquired cement major ACC posted a 59.70 per cent YoY fall in net profit at Rs 113.16 crore, while the bottom line of Ambuja Cements increased 49.50 per cent YoY to Rs 434.41 crore during the same period. New Delhi Television (NDTV) reported a profit of Rs 12.91 crore in Q3FY23, down 9.44 per cent year-on-year. Shares of ACC, Ambuja Cements and NDTV declined 22 per cent, 32 per cent and 34 per cent, respectively, since January 24.
Axis Securities has a тАШBuyтАЩ call on ACC with a target price of Rs 2,450. Shares of the company traded at Rs 1848 in the afternoon trade on February 15. тАЬWe maintain our тАШBuyтАЩ recommendation on the stock however we have reduced our estimates for FY24 and FY25 owing to delay in capacity expansion and the temporary shutdown of the plant in Himachal Pradesh,тАЭ Axis Securities said.
On asking which stock to buy at present, Baliga said, тАЬI donтАЩt think anyone is questioning the business of the Adani group. Once the issue gets sorted out they will come back on track but it will take a while. Most of the stocks are still quite expensive.тАЭ
тАЬWe could see a further correction. Stocks like Adani Enterprises can come down to around Rs 1,000. I prefer Adani ports and Adani Wilmar. Those who are holding the Adani group of stocks should continue to hold unless they are traders. If you have holding capacity for the next 2-2.5 years then you can look for averaging out at a lower level,тАЭ the market veteran said.
Also read:┬аMutual funds cut stakes in Adani Enterprises, Adani Green, 3 other Adani group stocks in January. Full details
Also read:┬аGMDC shares jump 12% after PSU’s net profit almost doubles in Q3
