Adani Enterprises Ltd (AEL) has been making headlines recently for its ambitious diversification into green hydrogen and its ecosystem. Despite facing some volatility in its stock following a notice from the US Department of Justice in November 2024, AEL has shown resilience and strength in its fundamentals and operations in FY25.
AEL is targeting a significant amount of capital expenditure over the next decade, with plans to invest in airports, data centers, copper, and green hydrogen projects. This expansion is expected to drive future growth for the company, with revenue, EBITDA, and net earnings projected to grow at impressive rates over the next few years.
The company’s strong performance in its airports and solar/WTG businesses, as well as the expected revenue contribution from its copper operations, are anticipated to enhance its financial performance and profit margins. As a result, return ratios such as RoE and RoIC are expected to improve significantly.
With a target price of ₹3,801 based on a SOTP (Sum of the Parts) valuation, analysts recommend a buy rating for AEL. Even without considering the value of the green hydrogen vertical, the SOTP value comes in at ₹3,029.
Overall, Adani Enterprises Ltd’s foray into green hydrogen and its commitment to significant capital expenditure in key sectors bode well for its future growth prospects. Investors are advised to keep an eye on the company’s developments in these areas as they could be key drivers of its performance in the coming years.
