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Five years after it once witnessed a massive rally on the mere news of Narendra Modi’s appointment as BJP’s prime ministerial candidate in September 2013, Adani Enterprises (AEL) seems to have lost its charm among stock market traders. Indefinite delay in pick-up of AEL’s coal operations in Australia is one of the chief reasons for the waning investor interest in the stock.
In a recent note to clients, global research house CLSA said it was dropping the stock from its coverage as the counter does not excite any more. AEL has a market-cap of $1.7 billion and is Gujarat-based businessman Gautam Adani’s flagship firm. It is through AEL that Adani spreads the reach of his business empire, which ranges from power, to ports and renewable energy. Almost all other listed Adani firms have come out post demerger from AEL.
“Its (AEL’s) coal operations in Australia are facing resistance from an anti-coal lobby, which has caused an indefinite delay in getting the project off the ground. This has led to low interest in the stock. Hence, we drop the coverage,” CLSA said.
‘Sell’ call
CLSA further said its final rating on the stock was a ‘sell’ with a target price of ₹74 that was not adjusted for corporate action. CLSA’s report also implied that not much remained in the firm after demerger of “futuristic renewables energy business and plans to do the same with city gas distribution.” Both CLSA and Adani group did not respond to e-mail queries.
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