Mumbai: Global brokerage Bernstein has gone bullish on Adani Group over robust execution and a healthy balance sheet, hailing its ability to execute at scale against competition while expressing comfort on debt levels as well as promoter holding and share pledge metrics.
The brokerage said in a comprehensive note that it is not concerned about debt levels, with debt repayment schedules and yields both described as comfortable. Promoter holding and share pledge metrics were also labelled as healthy by Bernstein.
“Across ports, logistics, renewables, and thermal power, the key constraint is securing large contiguous land with the right location and evacuation infrastructure. Evident in 0.5 Mn acres for renewable power with evacuation for most of the capacity,” the note stressed.
The Group focuses on large-scale projects (the largest port, coal plant, solar plant, storage plant, etc.), strong local stakeholder management driving fast execution, and prioritisation of capex over opex, it added.
On valuations, Bernstein noted that some names remain in line with peers, suggesting selective opportunities still exist within the portfolio.
On Adani Ports, Bernstein maintained an Outperform rating with a target price of Rs 1,880, noting that the company has strong pricing power, significant room to expand in the value chain, and competes primarily against government-run ports that are structurally less efficient.
On Adani Power, the brokerage also maintained Outperform with a target price of Rs 177, arguing that the thermal power market is effectively a two-to-three player industry where equipment supply is the key bottleneck.
Moreover, Adani Power has secured long-term commitments from both major Indian equipment suppliers, locking out competition for years to come – a strategic advantage Bernstein views as underappreciated.
On Ambuja Cements, Bernstein maintained a Market-Perform rating with a target price of Rs 542.
“Adani Ports continues to be one of our top picks, where we think they have strong pricing power, room to expand in the value chain and primarily govt-run inefficient ports to compete with,” said the note.
“We are also ‘Outperform’ on their thermal power business (Adani Power), although the stock has run up too fast since our initiation,” it added.
(IANS)
