Shares of Adani Ports and Special Economic Zone were in focus today after financial brokerage firm Nomura gave a buy call to the Adani Group firm with an unchanged target price of Rs 1,025. The target price translates into a 22 per cent upside for the stock of Adani Ports. Adani Ports stock rose 0.46 per cent to Rs 846.30 against the previous close of Rs 842.35 on BSE. The share has gained 13.22 per cent in a year and gained 15.49 per cent in 2022.
Market cap of Adani Ports stood at Rs 1.78 lakh crore. Total 0.63 lakh shares of the firm changed hands amounting to a turnover of Rs 5.30 crore on BSE. Nomura said the Adani Group firm is into an integrated logistics play and port volumes are trending above guidance.
The company may be requiring Rs 23,000 crore in capex over FY23-25, leading to a capex-intensive phase but concerns on group leverage are overdone, Nomura said in its latest note on Adani Ports. Nomura said Adani Ports was adequately de-linked from Group companies’ operational and stock performance due to improved governance.
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“With limited exposure to Group companies, we view ADSEZ as well insulated from Group performance. Further, over FY16-22 Adani entities’ cash flows have improved, and adequately cover interest expenses, and relative leverage levels (net debt/EBITDA) has dropped. Additionally, individual entities have also witnessed a lowering of share pledges, leading to adequate headroom to refinance maturing debt and less of a need to pledge ADSEZ shares in a major manner,” Nomura mentioned in the note.
“Further, Adani Logistics (ALL) has witnessed significant gain in container train market share from Concor. With a capex plan of Rs 23,000 crore and a focus on logistics and warehousing, we expect market share gains to accelerate for ALL and warehousing over FY23-25F,” it said.
AR Ramachandran, Co-founder & Trainer, Tips2Trades said, “Among all the Adani Group stocks, Adani Ports stands out due to its strong financial performance, consistent future prospects and decent valuations. Rs 860 remains a strong resistance above which Rs 925- Rs 940 could be achievable in the near term. Ideally, long-term investors should start accumulating only near Rs 765- Rs 770.”
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In June 2022, Citi assigned a buy call on the Adani Group firm. Citi gave a target price of Rs 981, a 35 per cent upside on BSE. Citi in a note said the firm reiterated FY23E volume guidance of 350-360 million tonnes and underlined April/May volumes were in line with guidance.
In Q1 of the current fiscal, Adani Ports reported a 16.1 per cent fall in consolidated net profit at Rs 1,072 crore for the quarter ended 30 June, 2022. The multi-port operator had posted a net profit of Rs 1,278 crore in the year-ago period.
Revenue from operations declined marginally to Rs 4,737 crore as against Rs 4,672 crore in the same quarter last fiscal.
Sequentially, profit grew 5 per cent from Rs 1,024 crore in the preceding quarter (Q4FY22). The EBITDA, however, clocked 11 per cent YoY growth at Rs 3,005 crore. The company also added that it recorded its highest ever quarterly cargo of 91 MMT, up 8 per cent YoY.
