Adani Ports and the Special Economic Zone opened higher on August 9 as brokers confidence in the stock, with some even increasing target price, a day after the company’s strong performance in first quarter of the current year.
The company recorded an increase of 82.57% year-on-year in consolidated net profit to Rs 2,114.72 in the quarter under review. Operating revenue increased 23.51% to Rs 6,247.55 crore from Rs 5,058.09 a year ago.
The major port company also saw a 200 basis point increase in domestic market share, even though more than 50% of its total port capacity was affected in six days due to Cyclone Biparjoy.
A basis point is a hundredth of a percentage point. At 9:16 am, shares were trading at Rs 790.75 on the National Stock Exchange, up 0.84% from the previous close. Broker Views
On the back of the earnings statement, the broker states that Adani Ports continues to be a “valued asset”.
Bernstein maintains an “outperform” rating on the stock and a target of Rs 888 per share, citing the company’s impressive volume and EBITDA growth.
He also applauded management’s commitment to strengthening the balance sheet.
APSEZ’s domestic cargo volume recorded a year-on-year (YoY) increase of 8%, which is three times the rate of India’s cargo volume growth over the same period. For the year 2024, Adani Ports projects a cargo volume of between 370 and 390 million tonnes, which will bring in a revenue of Rs 24,000 to 25,000 cores and an EBITDA of Rs 14,500 to 15,000 cores. Total investment for the year is expected to be Rs 4,000-4,500 crore.
Also Read: Adani Ports Q1 Net Profit Up 83% on New Purchases
CLSA is also bullish on Adani Ports and has a call to ‘buy’ with a target price of Rs 878. The company’s focus on optimizing the freight mix, adjusting for tariffs and favorable exchange rates has driven higher margins at the company’s ports.
The company’s inland port business has an EBITDA margin of 72% and its logistics business at 28%. Goldman Sachs has raised its target for Port of Adani to Rs 820. The company’s diverse revenue streams, including contributions from the Haifa Port acquisition, play a key role in driving revenue and profitability, he said.
Jefferies also raised its price target to Rs 890 per share with a “buy” rating. He expects even better margins as the efficiency of acquisition ports improves. The brokerage firm has revised its EBITDA estimates for fiscal years 2024 and 2025, forecasting 3-5% growth. Citi has one of the most bullish targets on the street at Rs 972, indicating a 23% upside from current levels. Given the strong first-quarter performance, he believes there is upside risk to the 2024 output forecast.
