Adani Group to invest $100 billion on energy transition and digital infrastructure: Jefferies

New Delhi:

Adani Group may spend $100 billion on energy transition projects and digital infrastructure over the next decade, research group Jefferies said in a report on Friday. This has been said in the Jefferies report on Friday. At the investors’ meet, Adani Group Management highlighted strong operating performance in FY24, 27 percent CAGR for five years and highest ever profit in the business.

The Adani portfolio achieved EBITDA (including operating income) of $10 billion in FY24. Which is 40 percent more than last year.

“More than 80 per cent of EBITDA comes from the infra-related business,” management also said, adding that the business’s high cash flow after tax (FFO) is sufficient to cover all debt maturities.

According to the company, contracted EBITDA is 80 percent of total group EBITDA and cash reserves are more than 20 percent of debt, which helps address the group’s cash flow and systemic risk. “Management does not see refinancing risk at group level,” the report also said, adding that despite rate and foreign exchange volatility, effective capital management planning has reflected in profile stability with rate hikes.

Talking about digital infrastructure, the group is able to establish multiple touchpoints with customers across the country. According to Jefferies, as the customer base on Adani’s core infra platform has crossed 350 million users, the group is expected to reap the demographic dividend.

“The group will look to capitalize on this in the medium term,” it said. For Adani Enterprises Limited, the GH2 (Green Hydrogen) projects will be the highest capital expenditure undertaking of the group.

“The airport business should benefit from growth in traffic and non-aeronautical trends. The company intends to bid for new airports under India’s Airport Privatization Scheme,” the report said.

Recently a copper project was launched and work has started on a PVC project from coal. “Management sees net debt/EBITDA at no more than 5 times capital expenditure,” the report said.

For Ambuja Cements, the company reiterated that the timeline of 140 million tonnes per annum (MTPA) by FY28 is on track and the company reported EBITDA/t at Rs. Continues to guide at 1,500.

“The company expects to reach Rs 3,650 per tonne (down from Rs 500 currently) by FY28, which will be the best globally,” Jefferies said, “planning to consolidate the companies into a single entity and work to identify the best structure.”

For Adani Energy Solutions Limited (AESL), the company’s target by FY26E is Rs. 170 billion to commission transmission assets under construction. Company in 12-15 months Rs. 1.1 trillion indicated a tariff-based competitive bidding pipeline, with AESL’s market share at 16 percent.

Meanwhile, Adani Green installed 10.9 GW of capacity in March and another 11 GW of projects are under implementation.

“The company aims to add 6-8 GW of capacity per year in FY25E and FY26E.

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