It all started after US Hindenburg Research published a report on the Adani Group. The total m-cap of the group tanked to Rs 9.93 lakh crore on February 7, 2023, from Rs 19.20 lakh crore as on January 24, 2023. However, some Adani Group stocks have managed to recover from their recent lows.
Shares of Adani Ports and Special Economic Zone (SEZ) have corrected significantly amid a brutal sell-off. The stock of IndiaтАЩs largest private sector port company is down over 44 per cent from its 52-week high of Rs 987.90, hit on September 20, 2022.┬а
The Adani Group stock hit a 52-week low of Rs 394.95 on February 03, 2023. However, it has recovered over 40 per cent from its recent lows. It ended 1.33 per cent higher at Rs 553.3 on BSE on February 7, 2023. Market cap of the firm rose to Rs┬а1,19,520.49 crore.
Earlier, the stock was in news amid a media report that suggested the Adani group could announce a share buyback for Adani Ports and another group firm Ambuja Cements, but the company later denied the report.┬а
B&K Securities believes that the valuations are attractive at current levels. “Around 69 per cent of the debt is US dollar-denominated, the bulk of the repayment is slated for the 2027-2032 period. A significant proportion of the companyтАЩs revenue is US dollar-denominated, providing a natural hedge against rupee depreciation, it said. The company seems to have sufficient liquidity buffer with cash and bank balances,” it said.
B&K Securities has maintained its buy rating with a target price of Rs 920, implying a 66┬аper cent upside from Tuesday’s close.
S&P Global Ratings has downgraded the outlook on two Adani Group businesses, Adani Ports and Adani Electricity, to negative from stable. “There is a risk that investor concerns about the group’s governance and disclosures are larger than we have currently factored into our ratings, or that new investigations and negative market sentiment may lead to increased cost of capital and reduce funding access for rated entities,” S&P said in a statement.
“The negative outlook reflects the risk of a deterioration in the credit profile of Adani Ports and Adani Electricity Mumbai due to governance risks and funding challenges for the larger Adani Group,” S&P said in a statement.
Credit Suisse, on the other hand, has upgraded Adani Ports to Outperform from Neutral, citing attractive valuations.
Adani Ports and Special Economic Zone (Adani Ports) also posted its numbers for the quarter ended in December 2022. The company reported a 13 per cent year-on-year (YoY) decline in the profit at Rs 1,336.51 crore for the quarter ended on December 31, 2022. Profit in the year-ago period stood at Rs 1,535 crore.┬а
Read more:┬аAdani Ports’ profit slips 13% to Rs 1,336.5 crore; revenue jumps 16%
Adani Ports’ revenue from operations increased 18 per cent YoY to Rs 4,786.17 crore during October-December 2022 period which was Rs 4,071.98 crore in the same period the previous year.
Continuing with our growth journey, Adani Ports is targeting FY24 EBITDA of Rs 14,500-15,000 crore. Besides an estimated capital expenditure of INR 4,000-4,500 Cr, we are considering total loan repayment and prepayment of around Rs 5,000 crore which will significantly improve our net debt to EBITDA ratio and bring it closer to 2.5x by March 2024, said Karan Adani, CEO and Whole Time Director at Adani Ports.
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