CLSA downgrades Adani Enterprises to 'sell'

MUMBAI: CLSA has downgraded its rating on Adani Enterprises to 'sell' from 'underperform' due to continued margin pressures in its mainstay coal trading business and potential write-down at its Carmichael coal venture.

"Coal trading Ebitda for 1Q was less than US$1/t (Rs60/t) – down 76% YoY, with segment profit at three-year lows. ADE (Adani Enterprises) expects that the coal import volumes will not collapse as feared, due to cost benefits for customers near coastal areas; but we see little signs of margins stabilising," said CLSA in a note.

CLSA has lowered target price on the stock to Rs 77 from Rs 78.

The flagship company of Adani Group on Wednesday reported a flat consolidated net profit of Rs 363.71 crore for the quarter ended June 30. The company had posted a consolidated net profit after taxes, minority interest and share of profit of joint ventures and associates of Rs 363.57 crore in the year-ago period.