Adani Power, Adani Green, AEL: Up to 49x returns! 3 Adani stocks in MOFSL's 2024 fastest wealth creator list

Among the fastest wealth creators over 2019-2024, three are Adani group stocks namely Adani Green Energy Ltd, Adani Enterprises Ltd and Adani Power Ltd. These three Adani stocks delivered 62-118 per cent returns compounded annually over a five-year period, with Adani Green shares rallying 49 times, topping MOFSL's this year's list of fastest wealth creators. 

An investor, who had invested Rs 10 lakh in the top 10 fastest wealth creators for the five year-period would have made Rs 1.75 crore in 2024 on the 10 stocks, a return CAGR of 77 per cent against Nifty's 14 per cent, MOFSL noted. 

Adani Green shares delivered 118 per cent returns, compounded annually, over the past five years. It was followed by Adani Enterprises, which went up 85 per cent annually. Jindal Stainless, Dixon Technologies, Linde India, Persistent Systems and CG Power delivered 62-85 per cent returns annually. Adani Power came in at 8th rank in the list rising 11 times or 62 per cent annually. Trent and Varun Beverages are two remaining stocks in the list of top 10 fastest wealth creators.  They stocks moved up 11 times each over 2019-2024. 

Adani Green Energy and Adani Power turned profitable from loss-making firms over this period. Adani Enterprises reported a profit CAGR of 34 per cent during the same period. 

"Nine of the top 10 fastest wealth creators have seen massive P/E re-rating. Further, 5 of the top 10 had P/E in excess of 100 time. Though partly justified by robust earnings growth, this is still a case of too much money chasing too few stocks. The current P/E of Nifty Midcap 100 is 44 times whereas that of the Nifty Small Cap 100 is 36x. This clearly merits caution," MOFSL said.

This is the third time in last four years when an Adani group stock topped the fastest wealth creator chart. Adani Transmission Ltd (now Adani Energy Solutions) topped the fastest list in 2021 and 2022. The three Adani stocks were also a part of MOFSL's all-round wealth creator list this time. 

"For the past 10 successive study periods, market benchmark indices have delivered muted returns ranging from 5 per cent to 15 per cent. Still, the top Wealth Creators have maintained their track record of 10-15 per cent outperformance over the benchmark. This reinforces our pet take on market strategy, “Forget markets, think stocks,” MOFSL said.

During 2019-24, share of top 10 in total wealth created stood at 37 per cent, the lowest in the last 20 years.

MOFSL said it clearly suggests that wealth creation during 2019-24 was widespread. "Further evidence of this is the strong performance by mid and small cap indices and stocks. During 2019-24, Nifty Midcap 100 CAGR is a robust 21 per cent and Nifty Small Cap 100 CAGR is a high 18 per cent," it said.

During 2019-24, the top 100 wealth creators of India Inc created all-time high wealth of Rs 138 lakh crore. The pace of wealth creation at 26 per cent CAGR was the second highest in the last 10 study periods, also significantly higher than the BSE Sensex return of 14 per cent, MOFSL said.