The shares of India’s largest private port operator gained traction last week after Motilal Oswal gave a ‘buy’ recommendation with a 25 percent upside from Monday’s(October 16th) closing price of Rs 805.65 a share.
At 12:15 p.m. on Tuesday, Adani Ports and Special Economic Zone Ltd shares were trading at Rs 809.70 a share on the National Stock Exchange, up 0.50 percent from the previous close.
The company’s shares have delivered returns of 22 percent in six months and 3.2 percent in a year.
The company’s revenue has increased by 35 percent yearly, rising from Rs 4,637 crore in Q1FY23 to Rs 6,247 crore in Q1FY24. During the same time period, net profit jumped by 122 percent, from Rs 986 crore to Rs 2,194 crore.
Based on a strong outlook on Adani Ports and Special Economic Zone Ltd(APSEZ). Motilal Oswal has given a target price of Rs 1,010 a share representing a 25 percent increase from Monday’s (October 16th) closing price.
The rationale behind providing such a recommendation is
● Adani Ports & SEZ (APSEZ) is India’s largest private port operator, with a more than 24% market share in cargo handling. The company has grown from operating just two ports (Mundra and Dahej) in FY11 to a portfolio comprising 14 ports across India.
● The company has achieved strong growth through Joint Ventures, long-term tie-ups, and acquisitions have played a key part in the growth, APSEZ has increased its existing ports through strategic initiatives, retail fuel stations, and the introduction of petrol trading.
● Motilal forecasts revenue to grow at a 15% CAGR over FY 23-25, led by a 12% volume CAGR at its ports, followed by SEZ income of INR4-5 billion per year and an increase in its logistics business. and PAT would grow at a 22% CAGR from FY23 to FY25.
● The company’s expansion in container handling has supported volume growth while also reducing dependency on commodities such as coal, resulting in cargo diversification. Cargo volumes at APSEZ have more than tripled to 339 mmt in FY23, up from 91mmt in FY13. This reflects a 14% CAGR, exceeding the industry’s growth rate (4% CAGR) over the same time period. Brokerage reported.
Adani Ports & Special Economic Zone is in the business of development, operations and maintenance of port infrastructure and is also linked in multi-product Special Economic Zone (SEZ) and related infrastructure contiguous.
Written by Omkar Chitnis
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