Adani Enterprises hits new high; m-cap inches towards Rs 3 trillion mark

In the past six months, AEL share price has surged 36 per cent as against 6 per cent decline in the Nifty 50 index.

Shares of Adani Enterprises (AEL) hit a new high of Rs 2,498.80, up 2 per cent on the National Stock Exchange (NSE) in Thursday’s intra-day trade on expectation of entry into the Nifty50 index, a gauge for the performance of India’s capital market. The stock traded higher for the sixth straight day and gained 6 per cent during the period.

In the past one month, it has rallied 15 per cent as compared to 6 per cent rise in the Nifty 50 index. Further, in the past six months, it surged 36 per cent as against 6 per cent decline in the benchmark index.

A sharp rally in AEL stock saw market capitalisation spike (market-cap) close to Rs 3 trillion mark. At 12:22 PM: AEL market-cap stood at Rs 2.84 trillion, just 5 per cent away to achieve the feat. Once achieved, AEL will be the fourth Adani Group listed company to touch the Rs 3 trillion mark. Currently, Adani Transmission is at the top of the group list with Rs 3.37 trillion market-cap, followed by Adani Green Energy (Rs 3.32 trillion) and Adani Total Gas (Rs 3.08 trillion).

AEL is one of the fastest growing diversified businesses that provides an extensive range of products and services. The company operates as an incubator, establishing new businesses in transport and logistics, and energy & utility sectors, apart from increasing focus on direct-to-consumer businesses.

AEL is leading decarbonization initiative of industries and mobility through Adani New Industries Limited (ANIL). Other next-generation of AEL’s strategic business investments are centered around airport management, roads, data center and water infrastructure, which has significant scope for value unlocking.

The review period to determine which stocks will enter and exit the Nifty indices ends next week. Typically, the NSE announces the changes by end of August or early September, which then get implemented at the close of trading on September 29.

"With the review period nearly complete,AEL is a high probability inclusion to the Nifty Index and will replace Shree Cement," said analyst Brian Freitas of Periscope Analytics who publishes on Smartkarma. CLICK HERE FOR FULL REPORT

Given the favourable outlook across all business segments, Ventura Research valued AEL at Rs 2,821 per share based on their SOTP valuation methodology. "A demerger of the incubating business can result in significant value unlocking and is an upside risk to its estimates. Most of its new businesses are still in an investment phase or at a nascent stage of profitability and thus financials don’t reflect the true potential of each business vertical AEL caters to," the brokerage firm added.