Gautam Adani's extensive conglomerate is integral to India's goal of becoming the world's third-largest economy by 2030, according to US-based Cantor Fitzgerald & Co. Playing a crucial role in the infrastructure sector, Adani Enterprises Ltd, the conglomerate's main company, has the potential to achieve a gain of over 50%, as indicated by analysts Brett Knoblauch and Thomas Shinske in a note dated January 28, marking the initiation of coverage for the company.
The US-based broker highlighted that as the most populous country globally, India aims to become the world's third-largest economy by 2030. Achieving this goal requires substantial investments in both digital and physical infrastructure, along with increased energy production, given the anticipated rise in energy consumption. The broker emphasized that such investments are crucial for India to drive productivity growth, especially considering its GDP per capita of USD 2,250, significantly lower than that of China (USD 12,556).
Regarding Adani Enterprises Ltd (AEL), the broker stated that the company is central to India's aspirations. AEL is a key player in importing energy resources, owning eight airports that contribute to a substantial portion of airline passenger traffic and cargo. Additionally, the company is actively involved in building data centers across the country, laying over 5,000 km of roads, and manufacturing solar and wind equipment to support India's renewable energy goals.
The broker also emphasized the attractive risk-reward profile at the current levels of AEL. They noted that AEL is one of the largest yet under-covered companies in India, ranking as the 10th largest non-financial publicly traded company by market capitalization in the country, which now boasts the fourth largest stock market globally. Despite its significant position, AEL has minimal analyst coverage, limiting investor awareness. The broker highlighted the need for more education among investors, as much of the information available about Adani has come from a short report published in early 2023.