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    ADANIENT.NS · NSI · Energy

    Adani Enterprises Limited

    Also onConsensus Drift

    Implied value per share

    INR -747.45

    Market price

    INR 3020.00

    Implied upside

    -124.7%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    AdjustedConsensus rests on as few as 2 analyst estimate(s).
    AdjustedFree cashflow is negative in at least one forecast year, so terminal value carries most of the valuation.
    AdjustedCapital expenditure runs at 24.7% of revenue against depreciation of 3.9%. A perpetuity has to be a steady state, so the terminal year uses maintenance capex at depreciation and then charges the reinvestment terminal growth requires (g/ROIC of NOPAT). The bridge is shown under Terminal Value.
    NoteRisk-free rate is an assumption: INR assumption - no free live source available for this market.

    Current EV/EBITDA of 36.1x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    INR -747.45-124.7%
    Exit multiple
    INR -127.17-104.2%
    Market price
    INR 3020.00

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (INR). Outflows negative.

    -56961549893-284807749460FY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayINR
    LineFY27FY28FY29FY30FY31CAGR
    RevenueINR 925.8bnINR 854.8bnINR 789.2bnINR 728.7bnINR 672.8bn-7.7%
    EBITINR 78.3bnINR 72.3bnINR 66.7bnINR 61.6bnINR 56.9bn-7.7%
    NOPATINR 58.5bnINR 54.1bnINR 49.9bnINR 46.1bnINR 42.5bn-7.7%
    Add depreciation & amortisationINR 35.9bnINR 33.1bnINR 30.6bnINR 28.2bnINR 26.1bn-7.7%
    Less capital expenditureINR -228.3bnINR -210.8bnINR -194.6bnINR -179.7bnINR -165.9bn-7.7%
    Less increase in working capitalINR 76.9bnINR 71.0bnINR 65.6bnINR 60.5bnINR 55.9bn+7.7%
    Free cashflow to firmINR -57.0bnINR -52.6bnINR -48.6bnINR -44.8bnINR -41.4bn+7.7%
    Discount factor0.94490.84370.75330.67260.6006-
    Present valueINR -53.8bnINR -44.4bnINR -36.6bnINR -30.2bnINR -24.9bn+17.6%
    Present Value Of The ForecastINR -189.8bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate6.80%INR assumption - no free live source available for this market (assumption)
    Equity risk premium8.00%Market assumption
    Beta0.864Reported 0.797, pulled toward 1.0 (Blume)
    Cost of equity13.71%Risk-free + beta x equity risk premium
    Cost of debt6.80%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationINR 4297.4bn80.1% of capital
    Total debtINR 1066.2bn19.9% of capital, book value as a proxy
    Tax rate25.2%Effective, capped at statutory
    WACC12.00%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareINR -747.45

    765% of EV

    Forecast FCFF, final year
    INR -41.4bn
    Capex at depreciation, working capital in reinvestment
    INR 42.5bn
    Less reinvestment at g/ROIC (20.8% of NOPAT)
    INR -8.9bn
    Capitalised
    INR 33.7bn
    ROIC (WACC floor)
    12.0%
    Terminal value, undiscounted
    INR 363.5bn
    Terminal value, discounted
    INR 218.3bn
    Enterprise value
    INR 28.5bn
    Less net debt
    INR 966.1bn
    Equity value
    INR -937.6bn

    Exit at 20.0x EBITDA

    Value per shareINR -127.17

    124% of EV

    Terminal value, undiscounted
    INR 1659.1bn
    Terminal value, discounted
    INR 996.4bn
    Enterprise value
    INR 806.6bn
    Less net debt
    INR 966.1bn
    Equity value
    INR -159.5bn

    Sensitivity

    Value per share (INR) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    10.00%-703.14-702.03-700.93-699.82-698.72
    11.00%-728.64-727.68-726.72-725.75-724.79
    12.00%-749.14-748.29-747.45-746.60-745.75
    13.00%-765.83-765.08-764.32-763.57-762.82
    14.00%-779.55-778.88-778.21-777.53-776.86

    Outlined: this model. Green text: above today's price of 3020.00. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Discount rate12.0%3.0%-9.0pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.