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

By Akshay Chinchalkar

Adani Group shares may have more help down the road from a monsoon tailwind in its recovery from a rout that wiped more than $100 billion from its market value.

Shares of at least four companies controlled by billionaire Gautam Adani – including Adani Enterprises Ltd.

This comes with a warning that the turmoil in the group is unprecedented since allegations earlier this year of accounting fraud and stock manipulation from US research firm Hindenburg shorted.

Here are four charts that show these effects for the period between now and the end of the year. Two of the companies included in the study, Adani Enterprises Ltd and Adani Transmission Ltd. , raised as much as $2.6 billion, indicating the group’s efforts to remain focused on growth.

The main stock of the Adani Group generated an average return of 21.4%, with a win rate, or the ratio of winning trades to losing trades, of 65% between May 15 and December 31. The chart shows that Adani Enterprises veered largely sideways from the beginning of June through the end of September, before rallying strongly through the end of the year. The stock completed a seven-year winning streak last year, having posted a valuation period gain in every year since 2016.

Adani for green energy


Adani Green, which was listed in 2018, has posted an average gain of around 92% in periods and has been on a steady upward trend with an 80% win rate. Notably, the difference between annual returns for the valuation period and the rest of the year was 115 percentage points, which indicates an upward seasonal bias during this period.

Bring me back the transmission


Seasonality has been very bullish for Adani Transmission between now and the end of the calendar year. The average return was 62%, with a win rate of 100%, and it has never decreased during the evaluation period since listing. The annual dividend yield with the rest of the year is 85%, which indicates a clear seasonality.

Adani ports


Adani ports were far from the time scale. The stock showed a tendency to peak in early June and drift sideways with a lot of volatility before continuing the rally in late November and into the end of the year. This explains the drop in average performance of about 10%, even with a win rate of 69%. The annualized return margin is only 3.2%, which indicates that the stock has no obvious seasonal upward bias.