Adani Enterprises shares in focus as copper arm mulls W&C entry

Shares of Adani Enterprises will be in focus during the trading session on Thursday after the flagship company Adani Group announced a joint venture with Praneetha Ventures through its wholly owned subsidiary Kutch Copper Ltd, which shall foray into wires and cables segment. The company informed about the same through an exchange filing on Wednesday.

The new joint venture (JV) is named Praneetha Ecocables Ltd and Adani Enterprises will have 50 per cent shareholding in the new entity through its subsidiary, said the company in the exchange filings. The authorised share capital and paid-up share capital of the new entity is Rs 10 lakh, divided into 1,00,000 equity shares worth Rs 10 each.

The newly formed JV will foray into manufacturing, marketing, distribution, buying and selling of metal products, cables and wires, said the exchange filing by the Gautam Adani-led firm. Recently, Kutch Copper had also announced that it had joined the International Copper Association as its newest member.

Shares of Adani Enterprises Ltd settled at Rs 2321.15, rising little more than half a per cent for the day. The total market capitalization of the Adani group firm stood at Rs 2.67 lakh crore. The stock has fallen nearly 23 per cent in the last six months. The stock has tumbled nearly 40 per cent from its 52-week high at Rs 3,743, hit in June 2024.

Adani Enterprises, through its subsidiary Kutch Copper, is establishing a cutting-edge copper smelter in Mundra, Gujarat. The initial investment of approximately $1.2 billion will enable an annual production capacity of 0.5 million tonnes in the first phase. The facility will manufacture copper cathodes, rods, and other byproducts, significantly contributing to India's ambition of self-sufficiency

Adani Enterprises saw its profit fall 97 per cent YoY to Rs 58 crore in the December 2024 quarter as the company said its earnings were impacted by high notional forex MTM loss in finance cost of Australia mining due to the depreciation of AUD. Its revenue from operations in the reporting quarter declined 9 per cent YoY to Rs 22,848 crore. Its Ebitda fell 5 per cent YoY to Rs 3,071 crore.

Jefferies retained its 'buy' rating on the flagship company Adani Enterprises with a price target of Rs 3,800. It said that the asset monetization will improve cash flows for the company, adding that it is initiating capex to double cell and module capacity.

Strong growth in airports and solar/WTG businesses and revenue contribution from copper are expected to enhance financial performance and profit margins, said Ventura Securities. Adani Enterprises is targeting Rs 6.5-7 lakh crore in capex over the next decade for its expansion into airports, data centers, copper and green H2 & its ecosystem, it said.

"We recommend 'buy' with our SOTP-based price target of Rs 3,801, over a 24-month period. Even if we don’t consider the value of green H2 vertical, the SOTP value comes at Rs 3,029. Recent volatility in the share price has led to significant increase in the stock beta. As volatility subside beta should decrease consequently alleviating the valuations," Ventura added.