The latest research by Ventura Securities has suggested BUY Call for Adani Enterprises Limited (AEL), positing a robust medium-term upside for investors. Adani Enterprises’ record Rs 25,000 crore rights issue underscores its aggressive capital-raising for a Rs 7 trillion capex cycle over the coming decade. Backed by successful vertical incubation, and an ambitious push into green hydrogen, airports, data centers, and copper smelting, AEL's diversified portfolio stands to profit from India’s industrial tailwinds. While short-term net margins will compress owing to debt-funded expansion and higher depreciation, Ventura projects a 43% upside in the next 24 months, with a target price of Rs 3,433 per share. Strategic governance, strong execution, and timely value unlocking through listings remain key planks of this rising conglomerate's narrative.

1. Ventura’s Investment Thesis: BUY on Execution Strength and Growth Levers

Ventura Securities, in its latest research report, advocates a BUY rating on Adani Enterprises Ltd , assigning a price target of Rs 3,433 per share over 24 months, representing an upside potential of 43.1% from the current market price of Rs 2,399. The recommendation is underpinned by AEL’s sterling record as an incubator of high-growth businesses, advancing into future-ready sectors including airports, green hydrogen, data centers, and copper refining. This reinforces confidence in AEL’s governance and project execution.

2. Rights Issue: Capital Supply for Capex-Heavy Growth

AEL is conducting a Rs 25,000 crore rights issue at an offer price of Rs 1,800 per share—a 25% discount to the current price—aligned with plans to deploy Rs 7 trillion in capex over the next 10 years. Promoter participation in the issue signals confidence and further bolsters governance transparency, while boosting public shareholding.

3. Ambitious Multi-Vertical Expansion Strategy

Adani Enterprises’ role as the Adani Group’s incubator is underscored by a sharp pivot toward capex-heavy, high-margin verticals:

• Green Hydrogen: Via Adani New Industries Ltd, targeting 2 MTPA green H2 by 2034, leveraging a fully integrated RE supply chain.
• Airports: Boasting eight key airport assets, including Navi Mumbai, and a focus on non-aero revenue and city-side development.
• Data Centers: Poised for exponential growth via a JV with EdgeConneX, targeting 1 GW of capacity powered by renewables by 2030.
• Copper Smelting: Commissioned a 0.5 MMTPA smelter at Mundra, with plans to double capacity, reducing India’s import dependency.

4. Stock Levels, Valuation, and Target

Ventura’s sum-of-the-parts (SOTP) valuation pegs the FY28 target at Rs 3,433 per share. At present, AEL trades at 18x FY28E EV/EBITDA, offering ample headroom for re-rating as emerging verticals blossom.

5. Financial Projections and Margins Matrix

• Revenues are projected to grow at a 17.4% CAGR (FY25–28E), reaching Rs 1,585 bn by FY28, primarily powered by green hydrogen, data centers, and airport segments.
• EBITDA to surge at 18.7% CAGR, estimated at Rs 238 bn by FY28 with margin expansion driven by new business verticals.
• Net profit, however, is expected to decline at a -12.8% CAGR to Rs 4,702 crore, reflecting higher depreciation and finance costs amid capex surge. Net margins to compress from 6.6% to 3% (FY25–28E).

Return ratios (RoE, RoIC) are set to dip near term but are expected to recover meaningfully after the investment phase.

6. Investment Themes: Value Creation and Incubation Engine

AEL stands out as a value-unlocking platform. Historical spinoffs—like Adani Total Gas, Adani Green Energy, and Adani Wilmar—demonstrate exceptional value creation. The planned listing of airports (FY27) and green verticals mirrors prior success in unlocking shareholder wealth. Each new business is architected for independent governance, scalability, and operational acumen.

7. Risks and Mitigating Factors

• Elevated Capex and Debt: The Rs 7 trillion expansion will spike leverage, pressuring return ratios and potentially elevating risks of cost and schedule overruns.
• Geopolitical & Execution Risks: International assets, particularly coal mines and silicon/wind imports, expose AEL to global volatility. Large-scale infra projects inherently run risks of regulatory delays and supply chain disruptions.
• Near-Term Margin Pressure: High depreciation, interest outflows, and lower FCF due to intensive capital deployment will weigh on short-term profitability and dividend distribution ratios.

Notwithstanding, the group’s execution pedigree and diversified capital strategies provide comfort.

8. Operational and ESG Excellence

AEL shows industry leadership in sustainability and governance:

• Sustainalytics medium risk rating (score 25.9) and a high CDP score reflect improved ESG risk management.
• Significant renewable energy integration into operations, water conservation, and emission reduction strategies underscore a resilient sustainability agenda.

9. Peer Comparison & Relative Strength

Despite lower near-term margins, Ventura sees AEL poised for multiple re-ratings as its new verticals gain profitability and the market recognizes the depth of its diversified pipeline.

10. Bottomline: Long-Term Play on India’s Infrastructure Upsurge

AEL remains an archetype of industrial transformation, channeling its balance sheet and strategic vision towards high-growth, nation-building businesses. Ventura’s bullish view, despite acknowledged short-term pressures, is rooted in the company’s unique incubation capability, execution prowess, and ability to unlock value through asset spinoffs and public listings.