Leading investment bank Jefferies has assigned a ‘buy’ rating on two Adani group companies Adani Ports and Adani Transmission after the Supreme Court appointed committee almost gave ‘clean chit’ probing the allegation hurled by short seller Hindenburg controversial report.

On the NSE, Adani Transmission has gained five per cent to ₹825 in the morning trading session while Adani Ports was up 4.88 per cent to ₹721.70 on Monday.

Jefferies equity research report had done a deep dive into the Adani Group’s eight listed entities and analysed its foray into new business segments such as green hydrogen, data centre and digital play, aerospace, defence and water infrastructure.


Addressing the recent concerns over deleveraging, the report pointed out that the Adani Group accomplished full prepayment of margin-linked share-backed financing of $2.15 billion before the committed timeline of March 31. Further, the Adani Group’s move to prepay the $500 million facility taken for the Ambuja acquisition and reduce promoter pledge position has helped in deleveraging.

Recommends Buy rating

Recommending a buy rating on Adani Ports, the report said that the company is India’s largest port operator by volume with a dominant 22 per cent market share. Jefferies expects the medium-term double-digit growth to continue as it replicates the Mundra market share gain story at its acquired ports.

Describing Adani Transmission as India’s only pure-play private-sector listed entity on the transmission and distribution sector, the report said the company can be a key beneficiary of the Distribution Amendment act if it comes through.

Adani Transmission’s focus on execution of projects, tie-ups with multiple vendors and higher proportion of sovereign counterparty projects are highlighted as key focus areas as it aims to scale up to 5.6 times by 2030, as per Jefferies.

Highlights strengths

The report highlights several strengths of Adani Power as a thermal company with potential for growth and scale in the long term.

Lastly Jefferies has highlighted that Adani Wilmar with its focus on diversifying into foods has been successful in growing its revenues and Ebitda by 19 per cent CAGR and 10 per cent CAGR respectively in past four years.

Including the seven listed businesses and cement businesses, total net debt for the Adani entities stood at ₹21 lakh crore, as of FY23-end. Some nascent businesses, being in early stage, may not be reflecting appropriately in Ebitda as of FY23, thus optically inflating net debt/trailing Ebitda, it said.

Jefferies noted that Adani group’s revenue grew 23 per cent compounded annually over FY18-23; Ebitda and net profit in the same period grew 20 per cent and 40 per cent annually, it said. Leverage stood at 4.2 times net debt/Ebitda on a trailing 12-month basis, as of FY23-end. Ebitda calculation excludes other income, Jefferies said.