Mumbai, May 22: Global brokerage firm Bernstein maintains a bullish outlook on the Adani Group, citing its robust implementation capabilities and strong balance sheet. The firm highlighted that the group’s ability to execute large-scale projects keeps it ahead of competitors.
Additionally, Bernstein expressed satisfaction with the group’s debt levels, promoter holdings, and share pledging data. In its note, the brokerage stated that it is not concerned about the debt levels, as both the debt repayment schedule and yield are comfortably positioned.
The note further explained, “In sectors like ports, logistics, renewable energy, and thermal power, a major challenge is acquiring vast, continuous land with the right location and evacuation infrastructure. The arrangement for evacuation for renewable energy, covering 0.5 million acres, is a clear testament to this.”
Bernstein noted that the group focuses on large-scale projects, such as the biggest ports, coal plants, solar plants, and storage facilities. It ensures rapid implementation through strong management with local stakeholders and prioritizes capital expenditure over operational expenses.
Regarding valuations, Bernstein mentioned that some companies’ valuations remain aligned with their peers, indicating that selective opportunities still exist within the portfolio.
For Adani Ports, Bernstein has maintained an outperform rating with a target price of ₹1,880. The firm asserts that the company possesses strong pricing power, ample scope for expansion in the value chain, and primarily competes with government ports that are structurally less efficient.
Similarly, for Adani Power, Bernstein has retained an outperform rating with a target price of ₹177. The firm argues that the thermal power market effectively consists of two to three major players, where equipment supply is the main barrier.
Moreover, Adani Power has secured long-term commitments from both major Indian equipment suppliers, eliminating competition for the coming years—a strategic advantage that Bernstein believes is undervalued.
For Ambuja Cements, Bernstein has kept a market-perform rating with a target price of ₹542. The note stated, “Adani Ports is among our top picks, where we believe they have strong pricing power and room for expansion in the value chain, primarily competing against inefficient government ports.”
It further added, “We also maintain an ‘outperform’ rating on their thermal power business (Adani Power), although the stock has risen rapidly since our initiation.”
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