Adani Ports - On Track To Surpass FY24 Volume Guidance: Motilal Oswal

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Motilal Oswal Report

Adani Ports and Special Economic Zone Ltd. clocked a cargo value of 36 million metric tonne in November 2023, recording 42% YoY growth, taking its year-to-date 24 volume to 275 mmt (up 21% YoY).

Management had highlighted that the company is well on its path to achieve its FY24 volume guidance of 390 mmt, however, during Apr-November 2023, Adani Ports achieved more than 70% of the top-end of the company’s full-year guidance range of 390 mmt.

During H1 FY24, Adani Ports’s domestic cargo volume growth was over two times India’s cargo volume growth rate. Eight of the company’s ports achieve record breaking half-yearly cargo volumes.

With the current monthly volume run rate of ~35 mmt, we believe that Adani Ports will effortlessly surpass its volume guidance for FY24. 

Additionally, in a positive development at Group level, Bloomberg reported that the U.S. government deemed Hindenburg Research's accusations as irrelevant. This decision was made by International Development Finance Corporation before approving $553 million loan for container terminal project in Sri Lanka.

With higher-than-expected cargo growth in the first eight months of FY24, we have increased our volume estimates by 2% to 410 mmt for FY24. We now expect Adani Ports to register 16% volume growth over FY23-25 and revenue/Ebitda/profit after tax compound annual growth rate of 23%/21%/17% over the same period.

Further, with positive development at the Group level related to the Hindenburg case, we expect re-rating in valuation multiples.

We reiterate our 'Buy' rating with a revised target price of Rs 1,210 based of 16 times FY25E EV/Ebitda (against 15 times assigned earlier).

Click on the attachment to read the full report:

Motilal Oswal Adani Ports Update.pdf

Read Document

Also Read: Adani Ports To Consider Raising Funds Via NCDs On Dec. 12

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.