Adani Group stocks extend rally, gain Rs 2.6 lakh crore in two sessions  

In FY24, the Adani Group's EBITDA surged by 40% YoY to Rs66000 crore, primarily fueled by Adani Power's EBITDA doubling, driven by capacity expansion, increased volumes, merchant contributions, and lower imported coal prices.

Adani Group stocks continued their surge for the second consecutive session on June 3, mirroring the bullish trend in Indian equities. The increased trading volumes contributed to a significant rise, adding over Rs 2.6 lakh crore to the group's market capitalization over these two sessions.

On Monday, Adani Enterprises jumped 7 percent, Adani Energy Solutions jumped 8 percent, Adani Ports and SEZ gained 9 percent, Adani Power up 12 percent, Adani Green Energy 7 percent, Adani Total Gas rose 7 percent, Adani Wilmar up 3.5 percent, Ambuja Cement gained 4 percent, ACC rose 3 percent while NDTV gained 5 percent.

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Over the past two trading sessions, Adani Power surged, contributing the most to market capitalisation gains, adding Rs 470,000 crore to its total market cap, which now exceeds Rs 3.3 lakh crore. Adani Enterprises followed suit, bolstering its market cap by over Rs 61,000 crore, reaching a total of over Rs 4 lakh crore.

Additionally, Adani Green and Adani Ports each saw an increase of over Rs 42,000 crore in market cap, while Adani Total Gas experienced a rise of over Rs 21,000 crore during the same period. Ambuja Cement and Adani Energy also made significant strides, adding over Rs 13,000 crore each to their respective total market caps. Total mcap of Adani group firms stands near Rs 19.65 lakh crore from Rs 17 lakh crore two day's ago.

The upward momentum in the group's stocks over the past two sessions follows robust earnings performance. In FY24, the Adani Group's EBITDA surged by 40% YoY to Rs66000 crore, primarily fueled by Adani Power's EBITDA doubling, driven by capacity expansion, increased volumes, merchant contributions, and lower imported coal prices.

"Adani Group's MCap was hit by a short seller report in late FY23. During FY24, the group focused on containing debt, reducing founders' share pledge. Total group EBITDA grew 40% YoY in FY24 (5yr CAGR:+27%), group raised fresh funds from equity/debt/strategic investors, promoter increased stake in group Cos and group Mcap rebounded. The group is back on expansion spree and eyeing USD90bn capex over next decade. In the report, we discuss the group's FY24 perf and way ahead", Jefferies India said in its note.

Other group companies saw EBITDA growth ranging from 16-33%, except Adani Wilmar which experienced a decline. Adani Enterprises achieved 29% YoY EBITDA growth, led by new businesses like ANIL/solar and Airports, and IRM trading. Adani (Ambuja) Cement's EBITDA increase was driven by a significant rise in unit EBITDA.

Adani Ports' EBITDA growth was propelled by a 24% increase in volumes. Adani Green recorded 33% EBITDA growth due to capacity expansion and higher CUF. Adani Energy Solutions saw a 16% EBITDA increase from new line additions, while Adani Total Gas achieved 27% YoY growth from volume increases and margin expansion due to lower gas costs. However, Adani Wilmar's EBITDA declined YoY due to inventory losses and hedge misalignment caused by oil price fluctuations.

The group's net debt, including debt related to the acquisition of the Cement business, stayed steady at Rs2.2 trillion in FY24 compared to Rs2.3 trillion. There was a significant improvement in net debt/EBITDA ratio, decreasing to 3.3x in FY24 from around 5x YoY. Adani Ports and Adani Power observed a reduction in net debt during FY24. However, Adani Enterprises and Adani Green experienced increased leverage due to new capital expenditure projects undertaken by the companies.

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