Adani Enterprises Shares in Spotlight as Copper Division Considers W&C Market Entry

Adani Enterprises' shares will be in the spotlight during Thursday's trading session after the leading firm, Adani Group, launched a joint venture with Praneetha Ventures.

Adani Enterprises' shares will be in the spotlight during Thursday's trading session as the flagship business, Adani Group, launched a joint venture with Praneetha Ventures through its wholly owned subsidiary Kutch Copper Ltd, which would enter the wires and cables industry.  The company disclosed this in an exchange filing on Wednesday.

The new joint venture (JV) is Praneetha Ecocables Ltd, and Adani Enterprises will own 50% of the new corporation through a subsidiary, according to the company's exchange filings. The new entity's approved and paid-up share capital totals Rs 10 lakh, divided into 1,00,000 equity shares at Rs 10 apiece.

The joint venture will manufacture, market, distribute, buy, and sell metal products, cables, and wires, according to the Gautam Adani-led firm's exchange filing.  Kutch Copper recently announced that it had joined the International Copper Association as its newest member.

Adani Enterprises Ltd's shares closed at Rs 2321.15, up little more than 0.5 percent on the day.  The Adani group's entire market capitalization stood at Rs 2.67 lakh crore.  The stock has dropped approximately 23% in the last six months. The stock has fallen about 40% from its 52-week high of Rs 3,743, set in June 2024.

Through its subsidiary Kutch Copper, Adani Enterprises is developing a cutting-edge copper smelter in Mundra, Gujarat.  The initial expenditure of about $1.2 billion will allow for an annual production capacity of 0.5 million tonnes in the first phase.  The factory will produce copper cathodes, rods, and other byproducts, significantly contributing to India's goal of self-sufficiency.

Adani Enterprises' profit fell 97 percent year on year to Rs 58 crore in the December 2024 quarter, citing a significant notional currency MTM loss in the finance cost of Australian mining due to the AUD depreciation. In the reporting quarter, its income from operations fell 9% year on year to Rs 22,848 crore.  Its EBITDA decreased 5% YoY to Rs 3,071 crore.

Jefferies maintained a 'buy' recommendation on Adani Enterprises, with a price objective of Rs 3,800.  It stated that asset monetization will boost the company's cash flows and that expenditure is planned to increase cell and module capacity.

Ventura Securities predicts that strong growth in airports and solar/WTG companies and copper revenue contributions will improve financial performance and profit margins.  Adani Enterprises plans to invest Rs 6.5-7 lakh crore in capital expenditure over the next decade to expand into airports, data centers, copper, green H2, and its ecosystem, the company said.

"We recommend 'buy' with a 24-month SOTP-based price target of Rs 3,801."  Even if we exclude the value of the green H2 vertical, the SOTP value is Rs 3,029.  Recent volatility in the share price has resulted in a considerable increase in the stock beta.  As volatility decreases, beta should fall, lowering values," Ventura added.