Adani's Copper Smelter Showcases Ability To Execute Large-Scale Projects, Says Jefferies
Jefferies maintained a 'buy' rating on Adani Enterprises with a target price of Rs 3,800 apiece.
The greenfield copper refinery project marks Adani Enterprises Ltd.'s entry into another new business, which can be one of the world's largest single-location custom smelters, according to Jefferies India Pvt.
"The full project, once commissioned, will be one of the largest single-location custom smelters in the world," Jefferies said in a note on March 31.
Kutch Copper, a subsidiary of AEL, commissioned the first unit of its greenfield copper refinery project in Mundra by dispatching the maiden batch of cathodes to customers.
This is a milestone project, marking AEL's entry into another new business, improving India's domestic copper supply, and the timed commissioning suggests the group's continued ability to plan and execute large-scale projects, Jefferies said.
The brokerage maintains a 'buy' rating on the Adani Group flagship company, with a target price of Rs 3,800 apiece, implying a potential upside of 19% from the current price.
The phase-1 of the project was commissioned, with a capital outlay of $1.2 billion, with 500 kilotonnes annual capacity. The copper site is located in Mundra, and targets to leverage the Adani Group's existing infrastructure and strategic location to gain synergies, the brokerage said.
In the past two decades, the Adani Group company has incubated several industry-leading businesses in ports, power, transmission and the fast-moving consumer goods sectors, and listed them, including by way of demergers, the note said.
Key demand drivers in the segment include demand from electrical vehicles, renewable energy, construction, electric consumption and telecommunication market, according to Jefferies.
Adani Group stocks added as much as Rs 50,246.9 crore in investor wealth, taking their total market capitalisation to approximately Rs 16.3 lakh crore during the day.
As of 10:01 a.m., the shares added Rs 40,799 crore to investor wealth at a market capitalisation of Rs 16.2 lakh crore. Adani Power Ltd. and Adani Total Gas Ltd. rose over 4.9% each, while Adani Ports and Special Economic Zone Ltd.'s shares hit a record high on Monday.
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