Adani Ports and Special Economic Zone Ltd. is anticipated to outpace India's overall growth, driven by a balanced port mix along the western and eastern coastlines and a diversified cargo mix. The company continues to invest heavily in the ports and logistics business to drive growth, according to Motilal Oswal Financial Services. Ltd.
Nuvama Research expects volumes of 460–480 million tonnes in the current financial year, with Mundra volumes to surpass 200 MT. Adani Ports is expected to consolidate revenues in the range of Rs 290–310 billion, with the net debt to Ebitda expected to be 2.2–2.5 times.
The company expects capital expenditure to be in the range of Rs 105–115 billion. The newly acquired ports and also the Colombo terminal will start operations during the year, aiding volume growth, Nuvama Research said.
Adani Ports' net profit rose 76.87% to Rs 2,014.8 crore in the fourth quarter of last financial year in line with estimates. India's largest private port operator's consolidated revenue rose 18.96% to Rs 6,896.5 crore, meeting estimates.
APSEZ Q4 FY24 Earnings Highlights (Consolidated, YoY)
Revenue rose 18.96% to Rs 6,896.5 crore vs Rs 5,796.9 crore.
Ebitda rose 23.61% to Rs 4,043.9 crore vs Rs 3,271.3 crore.
Ebitda margin expands 220 bps to 58.63% versus 56.43%.
Net profit up 76.87% at Rs 2,014.8 crore vs Rs 1,139.1 crore.
Here's What Brokerages Say
Motilal Oswal
The research firm maintains a 'buy' rating on Adani Ports with a target price of Rs 1,550 apiece, implying a potential upside of 16%.
Adani Ports is expected to record two-three–times of India's cargo-volume growth, driven by a balanced port mix on the western and eastern coastlines of India and an operational ramp-up at the recently acquired ports.
The logistics business will also serve as a value addition to the domestic ports business with a focus on enhancing last-mile connectivity.
Motilal Oswal expects Adani Ports to report 11% growth in cargo volumes over fiscal 24–26. "This would drive a CAGR of 14%/15%/19% in revenue/Ebitda/PAT over FY24–26".
Bernstein
Bernstein maintains 'outperform' rating but raised target price to Rs 1,500 from Rs 1,234 apiece, implying a potential upside of Rs 12%.
Adani Ports beat its guidance on all the metrics and successfully improved the quality of the balance sheet by reducing net debt to Ebitda.
Despite handling nearly half the containers for a country the size of India, the company continues to deliver strong volume growth (organic and inorganic).
The company has given a revenue guidance of Rs 290–310 billion, with most of the growth being driven by volumes and modest improvement/flat realisation.
Citi Research
Citi Research maintains a 'buy' rating and raised the target price to Rs 1,782 apiece from Rs 1,564 earlier, implying a potential upside of 33.1% from the previous close. The brokerage also has a positive catalyst watch open.
Strong results and a healthy guidance make the stock the brokerage's top pick despite its recent outperformance.
Citi said the results also show strong traction in the logistics business, with a 12% market share in container train operations.
The strong capex planned in FY25 not only underlines strong cash flows and balance sheet but also is an indication of intent to accelerate growth over the medium term.
High quality and dominant underlying business and attractive valuations and resolution of most group-related issues, make Adani Port particularly attractive.
Nuvama
Nuvama Institutional Equities maintains 'buy' rating on the stock and raised target price to Rs 1,574 from Rs 1,415 apiece.
Ten of the company’s ports have reported lifetime high cargo volumes for FY24. Adani Ports had acquired two new ports, taking the India port portfolio to 15.
The logistics business continues to outpace peers. Nuvama has inched up the estimates and anticipates revenue/Ebitda/PAT to grow at a CAGR of 12%/17%/21% over FY24–26.
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