Adani Enterprises Ltd., the flagship company of the Adani Group, has caught the attention of Cantor Fitzgerald & Co., a US-based brokerage firm. Analysts Brett Knoblauch and Thomas Shinske expressed confidence in Adani Enterprises, considering it to be central to Bharat’s economic ambitions. In a note dated January 28, Cantor initiated coverage with an “overweight” recommendation, emphasizing that the risk-reward ratio is attractive at current levels.
Cantor Fitzgerald has set an ambitious price target of 4,368 rupees for Adani Enterprises, suggesting a potential upside of 51% from Thursday’s closing price. Notably, Cantor is the sole entity actively recommending the stock, according to Bloomberg’s ratings data. Following this endorsement, Adani Enterprises witnessed a surge of as much as 5.4% on Monday, with other group firms also experiencing gains.
The brokerage firm’s positive outlook is seen as a significant boost for the Adani Group, which faced challenges in the past year due to a scathing report by a US short seller. The combined market value of the 10 Adani companies has more than doubled since February, reaching $185 billion from a record low of $82 billion.
Cantor Fitzgerald analysts highlighted Adani Enterprises’ current valuation, attributing it largely to its airports, roads, and the new energy segment. They noted that investors are essentially acquiring “six other businesses for free,” which collectively contributed over 85% of revenue in the fiscal year ending March 2023. Many of these businesses are currently in the incubation phase, providing potential for future growth.
Addressing concerns raised by the Hindenburg report from the previous year, Cantor Fitzgerald acknowledged the existence of “serious” concerns but emphasized that Adani has taken measures to reduce liquidity risk, enhance governance, and improve transparency. Despite the controversy, Cantor believes that Adani is now too significant to be ignored in the current landscape.
Adani Enterprises has consistently refuted allegations of fraud from the Hindenburg report, which at one point led to a staggering $150 billion decline in the group’s market value. With the Cantor Fitzgerald buy recommendation, positive sentiments are expected to bolster Adani’s conglomerate further in the financial markets.
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