Adani group shares in demand; Power, Total Gas, Green Energy rally up 16%

Adani stocks in focus:Shares of Adani group companies were in demand on Monday, zooming up to 16 per cent on the BSE in the intraday trade amid heavy volumes, on broad-based rally in the markets.

Market bulls were running amok on the Dalal Street as Exit polls predicted the Narendra Modi-led National Democratic Alliance (NDA) coming back with a landslide two-third majority.

Adani Enterprises, Adani Power, Adani Ports and Special Economic Zone, Adani Total Gas, Adani Wilmar, Adani Energy Solutions, Adani Green Energy, Ambuja Cements, ACC, and New Delhi Television (NDTV) rallied between 3 per cent and 16 per cent.

At 09:21 AM, Adani group stocks were trading higher by up to 13 per cent as compared to 2.7 per cent rise in the S&P BSE Sensex. With this, the total market capitalisation of 10 Adani group companies increased by Rs 2.02 trillion to Rs 19.88 trillion in the intraday trade today.

The exit polls are predicting a favorable scenario for the Indian markets, with the NDA expected to secure around 350-360 seats when counting concludes on June 4.

The victory of PM Modi/BJP augurs well for the economy and capital markets as it provides stability and continuity in policy-making with a single-party majority government, which will be expected to continue pushing its economic agenda, according to Motilal Oswal Financial Services.

Adani group is among India's top business houses with an integrated energy and infrastructure platform in India and a long track record of successfully executing large-scale projects.

It is one of India’s largest listed business incubators in terms of market capitalisation and is driven by the philosophy of incubating businesses in four core industry sectors - energy and utility, transportation and logistics, consumer, and primary industry. It represents an effective complement of established and developing businesses which address the needs of India.

Among individual stocks, Adani Power hit a new high of Rs 875 as it zoomed 16 per cent in the intraday trade today. The stock of the integrated power utilities company has surged 25 per cent in the past two trading days.

Adani Power said peak power demand is expected to reach 260 gigawatts this summer. Even while renewable power capacities are growing, India will need more thermal power to meet this rising demand. Looking at this, the government has issued directives to ensure adequate fuel supply for thermal power plants and to maximize their uptime. It has also raised its projections for incremental thermal power installation from 50 gigawatts to more than 80 gigawatts.

Adani Power, as India's foremost private power producer, is very well placed to benefit from the long-term power demand outlook. Various DISCOMs have already announced their intention to invite bids for long-term PPAs from thermal power projects.

Adani Total Gas, meanwhile, rallied 15 per cent to Rs 1,197.95, followed by Adani Green Energy (13 per cent to Rs 1,915), Adani Energy Solutions (11 per cent at Rs 1,249), NDTV (10 per cent at Rs 274.90), Adani Enterprises (10 per cent at Rs 3,743) and Adani Ports (10 per cent at Rs 1,575).

Adani Enterprises' strategic business investments are centered around green hydrogen ecosystem, airport management, data center, roads and primary industries like copper and petrochem - all of which have significant scope for value unlocking.

Adani Enterprises, in its FY24 annual report, said that net Debt to earnings before interest, tax, depreciation, and amortisation (Ebitda) further fell to 2.2x from 3.3x over the past year, giving it additional headroom for future growth.

Meanwhile, given the renewable energy (RE) growth potential, the group power businesses Adani Green Energy revised its FY 2029-30 target from 45 GW to 50 GW.

The Indian government’s estimates project a 6.2 per cent compounded annual growth rate in power demand, which is set to double by FY 2031-32 as compared to the all-India demand in FY 2020-21.

Key drivers of this projected growth are rising urbanisation and consumption of power by domestic and commercial users, growth impetus being given to the manufacturing sector through various production-linked incentives, higher demand for irrigation, railway traction, etc. On the other hand, one of the major policy thrusts of the Government, a reduction in Transmission & Distribution losses, which is projected to improve from 16.5 per cent in FY 2021-22 to 12.6 per cent in FY 2031-32, will partially temper the translation of growth in energy requirements to overall electricity demand, Adani Power said in FY24 annual report.