Tata Group vs Adani Group shares: Which one is outperforming markets better in 2022?

The shares of almost all Adani Group companies have been consistently trending in the equity markets on account of colossal & ambitious Capex plans, foray into new ventures, mergers, acquisitions, and needless to say, the zealous green energy goals

Up till now, the year 2022 has been on a tumultuous roller-coaster ride for global and domestic equity markets. The geopolitical crisis, sky-high energy & commodity prices, raging inflation, rate hikes by major world economies, and mixed earnings season are among the key factors that have contributed to the inflated levels of volatility in the equity markets.   

Year-to-date, Nifty 50 is up by a mere 1.76 per cent. The headline index has witnessed two major corrections of approximately 13 per cent & 15 per cent, respectively. However, since its low of 15,293.50 recorded in mid-June, the index has made a strong comeback, exhibiting a sharp rally of around 17 per cent i.e. more than 2,600 points in less than three months. 

Ahmedabad-based tycoon, Gautam Adani has been on a phenomenal roll in 2022, so far. According to Forbes Real-Time Billionaires list, Gautam Adani (currently, Asia's richest man) has overtaken Amazon Founder Jeff Bezos to become the third-richest person in the world. Gautam Adani’s net worth has skyrocketed over USD 60 billion this year to USD 148 billion, making him the biggest gainer year-to-date. 

The shares of almost all Adani Group companies have been consistently trending in the equity markets on account of colossal & ambitious Capex plans, foray into new ventures, mergers, acquisitions, and needless to say, the zealous green energy goals. 

The shares of Adani Power have given hefty fourfold returns YTD. In the same timeframe, FMCG major Adani Wilmar’s stock skyrocketed by 162 per cent. The following table exhibits the YTD returns of all Adani stocks:   

Tata Group stocks have significantly underperformed Adani stocks in 2022, so far. Year-to-date, The Indian Hotels Company is the top gainer among Tata stocks, delivering returns of 73.03 per cent. Oriental Hotels and Tata Elxsi are the next in line, recording gains of 69.14 per cent & 50.29 per cent, respectively. The following table exhibits the YTD returns of seven top-performing Tata stocks: 

Currently, the combined market cap of Adani Group stands at approximately Rs 20 lakh crore (i.e. USD 250 billion). However, high-debt levels, coupled with low cash flows of the majority of Adani companies, stand as a genuine concern for investors. 

It seems that the story has just begun and more plot developments are expected to unfold in the coming months. Investors should keep a close eye on these stocks to track further action!