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Adani Transmission MCap touches Rs 4-trillion mark for the first time

The stock has become the 15th Indian listed firm and the second Adani Group company to achieve this milestone.

August 17, 2022 / 06:02 AM IST
Gautam Adani, Chairman, Adani Group

Gautam Adani, Chairman, Adani Group

 
 
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Adani Transmission Ltd on August 16 hit Rs 4 trillion in market capitalisation for the first time after its shares rallied over 104 percent this year. The stock touched an all-time high after gaining for three consecutive sessions.

The stock was trading at a record high of Rs 3,586.95 on BSE, up 1.5 percent from its previous close with a market cap of Rs 4.01 trillion. So far in August, the scrip rose over 15 percent while in July it climbed over 25 percent, its biggest monthly jump since August 2021.

The stock has become the 15th Indian listed firm and the second Adani Group company to achieve this milestone. Earlier, Reliance Industries, Tata Consultancy Services, HDFC Bank, Infosys, Hindustan Unilever, ICICI Bank, Life Insurance Corp of India, HDFC, State Bank of India, Bajaj Finance, Adani Green Energy, Bharti Airtel, Kotak Mahindra Bank and ITC attained it.

Investors continued to buy Adani Group stocks as the group expanded rapidly into multiple operations, which led to earnings visibility. All listed Adani group companies generated multi-bagger returns.

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Interestingly, only two analysts cover this stock, according to Bloomberg. Jefferies has a buy rating while DAM Capital has a sell rating.

The firm recently reported its June quarter earnings and it was unimpressive. It reported net profit which declined 61 percent year on year to Rs 168 crore during the quarter. Total income rose 11 percent to Rs 3,249.74 crore. Total debt for fiscal year 2022 stood at Rs 32,170 crore, up 14 percent from a year ago.

Adani Transmission is India’s largest private-sector player in the transmission sector with a 22 percent market share. The company also has a B2C presence through its Mumbai distribution business. Mumbai distribution business saw a 27 percent year-on-year rise in power sales. Distribution losses were flattish at 6.9 percent YoY and higher QoQ (4.7 percent ), though well below the regulatory requirement.

The management during a call mentioned that smart meters are an exciting opportunity and that the company could spend Rs 100 billion in this area in the next few years. Adding to that, the Mundra distribution circle, which is being developed by the company, could potentially be one of the largest in the country, as per the management.

"Earnings should rise 1.7x in the next 3 years, with refinancing benefits. Any distribution amendment should only add to the co's potential, in our view," Jefferies India said in a report.

Ravindra Sonavane
first published: Aug 16, 2022 03:28 pm
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