Reliance, Adani Ent, Adani Ports: What Should Investors Do With Adani, Ambani Stocks Before Election Results

As the Lok Sabha Election's phase 3 continues, Prime Minister Narendra Modi took a jibe at the opposition party and Rahul Gandhi. This time, it involved India's richest men Mukesh Ambani and Gautam Adani. Following his statement, on May 9, Reliance Industries (RIL) and Adani Group stocks broadly witnessed a bearish tone.

Heavyweight Reliance, which is the largest stock and largest company in India in terms of market cap, dipped by 1.8% to end at Rs 2786.80 apiece on BSE. Reliance's market cap stood at Rs 18,85,462.71 crore. With the decline in the most-valued stock of exchanges, both Sensex and Nifty were run over by bears.

Meanwhile, sharp selling in Adani stocks was another contributor to the downfall of the Indian stock market. Except for Adani Power, all other Adani Group-backed shares nosedived.

The worst to take a hit were Adani Energy Solutions, flagship company Adani Enterprises, Adani Green Energy and Ambuja Cement which fell between 3-4%. While cash-cow Adani Ports also tumbled by over 2.6%. Meanwhile, ACC, Adani Total Gas and Adani Wilmar dropped by 1-2%.

Both BJP and Congress parties have been in an intense riff-off on various topics like tax rates, agendas and schemes since the start of the election in early April. This time the attention was brought upon India's top industrialists and billionaires Ambani and Adani.

This week, PM Modi shed light on why Rahul Gandhi has become silent on his "Ambani-Adani" offensive. Through his X handle, Modi said, "Why has Shahzade Ji stopped talking of Ambani and Adani in this election all of a sudden? People are smelling a secret deal..."

In a rally in Telangana, the PM said that for five tears, Congress' shehzade (referring to Rahul) kept chanting one thing. After his Rafael issue got grounded, he started a new chant. Five industrialists, five industrialists, five industrialists. Modi added, that gradually Rahul started saying Ambani-Adani.

However, as per Modi, ever since the elections were announced, Rahul has stopped abusing Ambani and Adani.

Making remarks like Zaroor daal mein Kuch kaala hai (something is wrong), PM Modi asked Telangana soil, Was there a deal? Why did you stop abusing Ambani and Adani overnight?.

PM Modi's statement comes after Rahul and Congress both have accused the saffron party of favouring top industrialists. When the Hindenburg scandalous report orchestrated a panic selling leading up to hundreds of billions of dollars in erosion in Adani Group shares, toppling Gautam Adani's ranks in the billionaires' list, Rahul and Congress were at the forefront of linking the Adonis with PM Modi and his party.

Also, in one of his speeches, Rahul made remarks like Modi's government has made 22 Indian billionaires, and his party Congress aims to crores of Indian citizens 'lakhpati' if they come to power.

And Gandhi did respond to PM Modi's latest remarks. He said via his X handle, "This is the first time you have talked about Ambani and Adani in public," adding, "The country knows who is the 'driver' and the 'helper' of the BJP's tempo of corruption."

Coming to Adani and Ambani, both are currently at the heart of India's growth. From renewable energy to net zero emission to $ 5 trillion economy, Adani and Ambani's foot into various sectors are crucial for PM Modi's vision of self-reliant India!

The latest report by CNN revealed that these three men - Modi, Ambani and Adani - are playing a fundamental role in shaping the economic superpower India will become in the coming decades.

At over $230 billion worth, Reliance is engaged in energy petrochemicals, oil and gas, retail, telecom, textiles, and media businesses. Also, the multi-billion dollars worth Adani Group has major businesses in ports, energy, FMCG, media, cement, power, infrastructure, and oil & gas. The two conglomerates have continued to steady growth over the past few decades.

So, what should investors do with Adani and Ambani stocks?

Reliance Share Price:

Ambani has not shied away from expressing the growth of his companies in various sectors that have contributed to the growth of the economy.

Last month, during the Q4 results for FY24, Ambani said, "Initiatives across RIL's businesses have made a remarkable contribution towards fostering the growth of various sectors of the Indian economy. It is heartening to note that alongside strengthening the national economy, all segments have posted robust financial and operating performance. This has helped the Company achieve multiple milestones."

For a prosperous India, Ambani believes five goals should be achieved.

They are: 1. Digital Tools Everywhere 2. Green Energy and Materials Everywhere 3. Financial Empowerment, Entrepreneurship, and Gainful Employment Everywhere 4. Healthy and Responsible Consumption Everywhere 5. Quality Education and Healthcare Everywhere.

In Reliance's previous AGM, Ambani said, "If we combine the resultant material prosperity with India's age-old cultural prosperity, India will also become a land of Empathy Everywhere, Positivity Everywhere, Harmony Everywhere and Happiness Everywhere." He added, "This is what Reliance has been doing through all our businesses and philanthropic endeavours."

FY24 net profit of Reliance stood at Rs 79,020 crore, holding the title of the most profitable private company in India. Further, FY24 revenue struck a new milestone crossing the Rs 1,000,000 crore mark. The revenue by the end of FY24 stood at Rs 1,000,122 crore.

What should you do with Reliance shares? BUY!

Geojit is the latest to upgrade its outlook on Reliance. In its research note, Reliance said, "RIL reported strong operational performance in Q4FY24. Jio's stronghold in the Indian telecom market, rapid adoption of 5G and home services, accelerated store expansion, omnichannel strategy to meet consumer needs, robust growth momentum in the oil and gas segment and strong revival in its key O2C segment augur well for the company. Going forward, the management aims to maintain net debt to EBITDA below 1x and support growth initiatives via internal accruals. Hence, we upgraded our rating on the stock to BUY with a revised target price of Rs. 3,308 based on SOTP valuation."

Adani Enterprises Share Price:

Adani Enterprises is the flagship company of Adani Group, holding majority stakes in other Adani listed stocks. The port-to-power empire's chief Gautam Adani believes that India is on track to a $25-$30 trillion economy by 2050 and drive India's stock market capitalization to over $40 trillion.

In Adani Enterprises AGM last year, Gautam said, "While economic cycles are getting increasingly hard to forecast, there is little doubt that India, the world's fifth largest economy, will become the world's third largest economy well before 2030 and the second largest by 2050. Our nation's demographic dividend is expected to drive consumption and accelerate the growth of a tax-paying society at a record pace."

He further added, "It took us 58 years to get to our first trillion dollars of GDP, 12 years to get to the next trillion and just 5 years for the third trillion. I anticipate that within the next decade, India will start adding a trillion dollars to its GDP every 18 months. This puts us on track to be a $25-$30 trillion economy by 2050 and drive India's stock market capitalization to over $40 trillion."

Recently, research by US-based brokerage Cantor Fitzgerald, AEL is at the core of everything India wants to accomplish. AEL is the most relied upon company for bringing energy resources into India; it owns eight airports that account for ~25% of airline passenger traffic and ~33% of cargo, it is building several data centers throughout the country, it is contracted to lay more than 5,000 km of roads, and is an integral manufacturer of solar and wind equipment for India's renewable energy ambitions, among numerous other businesses.

Hence, Cantor added, "We are initiating coverage of Adani Enterprises Limited (AEL) with an Overweight rating and Rs 4,368 12-month PT. India is now the most populous country in the world and has ambitions to be the world's third-largest economy by 2030. To get there, India needs to invest in both digital and physical infrastructure, in addition to increasing its energy production, as energy consumption will be meaningfully higher."

Hence, as per Cantor Adani is the core of everything that India needs on its resilient growth journey.

FY24 net profit and total income of Adani Enterprises stood at Rs 2,464 crore and Rs1,28,734 crore respectively.

Energy Vision of Adani and Ambani:

Both Adani and Ambani are focusing on the energy sector extensively.

Earlier, sources told GoodReturns.In that Adani, the poster boy of Indian infrastructure has made an investment plan of $14 billion (Rs 1.2 lakh crore) in FY25 through its portfolio of 11 listed companies. FY25 projected CAPEX is up by 40% than its capex for FY24, which is estimated at $10 billion. As per the sources, more than 70% will be towards green energy. While the majority of the remaining investment will go for fast-growing Airports and Ports businesses. These investments will set the stage for exponential profit growth.

While Ambani has said Reliance remains committed to their projects and initiatives, including those in the New Energy segment, which will bolster the company, and help it deliver sustainable growth for the future.

As per Bloomberg Billionaires index, Mukesh Ambani continues to hold the title of richest man in India and all of Asia with a net worth of $107 billion. Ambani's net worth is ranked 11th in the world billionaires list! Following closely, Adani at 15th rank in world list, is the second richest man in India and Asia with net worth of $93.2 billion.