Adani Enterp. (ADANIENT)

FairStock Score: 77/100 — STEADY

Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• 5-year revenue CAGR of 19.88% shows past scaling ability.
• ROE of 26.14% and Piotroski F-score of 7/9 indicate recent financial and operational strength.
• Promoter holding of 74.67% aligns controlling shareholders with minority interests.
• Latest quarter net profit of ₹5,727 Cr provides short-term earnings momentum, though quality needs scrutiny.

Concerns

• Negative free cash flow of ₹-21,196 Cr shows the business deeply consumes cash.
• Price of ₹2,300.50 is far above Graham Number of ₹1,045.31, implying negative margin of safety.
• High leverage with Debt/Equity of 2.03 and Altman Z-Score of 1.83 raises financial risk.
• Sales growth fell 5.11%, ROCE is only 9.45%, and EV/EBITDA of 801.49 suggests extreme market optimism.

AI Analysis

Let me look at Adani Enterprises the way I look at any business: first, do I understand it, and can I estimate what it will earn over the next ten years? The label says trading-minerals; I understand commodities, but the balance sheet and cash flows make me pause. Over five years revenue compounded at 19.88%, a fine rate, but last year sales fell 5.11%. The latest quarter had ₹24,820 Cr of sales and ₹5,727 Cr of profit—a near 23% margin, hard to believe for a trading business; perhaps non-recurring or accounting effects. As Graham would say, the investor's chief problem is himself. I must not let profit growth of 225.47% seduce me when the P/E is 67.65 and EV/EBITDA is 801.49. That is an enormous price for a cyclical with negative free cash flow. ROE of 26.14% looks attractive, but ROCE is only 9.45%—the high return is leverage, not operating magic. Debt/equity is 2.03, current ratio is 1.18, and Altman Z-score is 1.83. These are not numbers of a company with abundant room for error. Graham's Number gives roughly ₹1,045; at ₹2,300.50, I have no margin of safety—in fact, a negative 106.81% margin. Promoter holding at 74.67% aligns owners and managers, and a Piotroski score of 7/9 is decent, but I cannot value a business on a scorecard. Dividend yield of 0.06% means the patient shareholder gets almost nothing while waiting. In commodities, today's high earnings can be tomorrow's trap. This is a cyclical I would keep on a watchlist, not buy.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer