With the steep fall in the Adani group of companies since January 24, 2023, valuations of the entire 10-listed group companies namely Adani Total Gas, Adani Green Energy Ltd, Adani Transmission Ltd, Adani Enterprises Ltd, Adani Wilmar Ltd, Adani Ports and Special Economic Zone Ltd, Adani Power Ltd, ACC Ltd, Ambuja Cements Ltd and New Delhi Television have come down sharply.
Data showed that Adani Total Gas Ltd tanked the most 80.60 per cent to Rs 753.60 on February 24 from Rs 3885.45 on January 24. Meanwhile, the price-to-earnings ratio (P/E), an indicator which tells how overvalued or undervalued the stock price is in comparison to earnings, declined sharply to 156.48 times from 806.78 times during the same period.
Adani Green Energy is the next big loser on the list. The scrip tanked 74.56 per cent to Rs 486.75 from 1,913.55 during the same period. The P/E ratio of the company also cooled down to 131.35 times from 516.38 times on January 24, 2023.
Adani Transmission, Adani Enterprises, Adani Power, Adani Wilmar and Adani Ports and Special Economic Zone also declined somewhere between 26 per cent and 75 per cent since January 24.
While sharing his view on the valuation of the Adani group of stocks, independent market analyst Ambareesh Baliga said, “The correction is bringing the Adani group of stocks to their real levels. However, I still believe that Adani’s group of stocks are still expensive. I think Adani Enterprises should be below Rs 1,000 and Adani Wilmar should be somewhere between Rs 280-300 levels. However, investors can look for Adani Wilmar and Adani Ports among the group companies. Earlier, Adani stocks were mostly trading at artificial levels.”
The price-to-earnings ratio of Adani Transmission declined to 72.29 times from 279.86 times, Adani Enterprises to 72.94 times from 191.01 times, Adani Power to 5.59 times from 10.46 times, Adani Wilmar to 65.15 times from 103.06 times and Adani Ports to 23.72 times from 32.29 times.
Recently acquired Amuja Cements, ACC and NDTV also plunged between 25 per cent and 33 per cent in the past one month. Following the fall in the shares of these companies, the price-to-earnings of Amuja Cements came to 35.37 times on February 24 from 51.07 on January 24. P/E of ACC declined to 50.01 times from 67.55 times and NDTV to 17 times from 25.32 times. Overall, the combined market capitalisation of Adani group plunged by around Rs 12 lakh crore amid the ongoing free-fall in the group’s stocks since January 24.
Kranthi Bathini, Equity Strategist, WealthMills Securities said, “Adani group is one the groups which rallied the most in the past 2 years. The pressure was high in terms of valuations. Investors don’t like this kind of volatility and Hindenburg news added further pressure on the group stocks. Investors who were sitting on profit preferred to take back capital. At present, investors should not catch falling knives on Dalal Street.”
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