Adani stocks have seasonality to help in recovery from $100 billion rout

Stocks of at least four companies controlled by billionaire Gautam Adani - including the conglomerate's flagship Adani Enterprises Ltd. - show a strong tendency to climb in the second half of year



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By Akshay Chinchalkar

Adani Group equities may have a little more help on the way from a seasonal tailwind in their recovery from the rout that wiped more than $100 billion from their market value.
Stocks of at least four companies controlled by billionaire Gautam Adani — including the conglomerate’s flagship Adani Enterprises Ltd. — show a strong tendency to climb in the second half of year, a seasonality analysis by Bloomberg News shows. 
This comes with the caveat that the turmoil in the group has been unprecedented since allegations earlier this year of accounting fraud and stock manipulation from US short-seller Hindenburg Research.

Below are four charts that capture these effects for a period beginning now till year-end. Two of the companies in the study, Adani Enterprises Ltd. and Adani Transmission Ltd., are seeking to raise as much as $2.6 billion, signaling the group’s efforts to continue to focus on growth.

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The flagship stock of the Adani group has averaged a return of 21.4%, with a win rate, or the ratio of winning trades to losing trades, of 65% in the period between May 15 and Dec. 31. The chart shows that Adani Enterprises has largely drifted sideways from the start of June until the end of September, before rallying strongly through until the end of the year. The stock completed a seven-year winning streak last year, having gained in the evaluation period in every year since 2016.

Adani Green Energy

Adani Green, which listed in 2018, has clocked average gains of about 92% in the periods and been in a consistent uptrend with a win rate of 80%. Notably, the difference between the annualized returns for the evaluation period and the rest of the year has been 115 percentage points, denoting upside seasonal bias during this period. 
Adani Transmission


Seasonality has been firmly bullish for Adani Transmission between now and the close of the calendar year. The mean return has been 62%, with a win rate of 100%, having never fallen during the evaluation period since listing. The annualized return spread with the rest of the year is 85%, denoting the clear presence of seasonality. 

Adani Ports

Adani ports has been an outlier for the time range. The stock has shown a tendency to peak out in early June and drift sideways with plenty of volatility before a rally takes hold in late November through until year end. That explains the low average performance of around 10%, even with a 69% win rate. The annualized return spread is a mere 3.2%, which shows the absence of any pronounced seasonal upside biases for the stock. 

First Published: May 15 2023 | 10:00 AM IST

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