The shares of one of the leading Adani stock, specializing in the development, operation, and management of ports and logistics infrastructure, in focus after Ventura securities Initiates Buy Target with more than 40 percent Upside Potential on it.
Price action
With a market capitalization of Rs. 2,41,417 crores on Thursday, the shares of Adani Ports & Special Economic Zone Limited were trading at Rs. 1,167.80 up by 4.5 percent making a high of Rs. 1,190 per share compared to its previous closing price of Rs. 1,128.90 per share.
What Happened
Adani Ports & Special Economic Zone Limited, specializing in the development, operation, and management of ports and logistics infrastructure in focus after Ventura securities Initiates “Buy” Target of Rs. 1,674 with more than 40 percent upside potential.
Here are the reasons for the potential “Target “
- Integrated Business Model: Adani Ports & Special Economic Zone combines SEZ infrastructure with logistics and maritime solutions, creating a robust and diversified business model.
- Market Leadership: The company has India’s largest and fastest-growing port operator, APSEZ leverages strategic port locations and end-to-end logistics to deliver superior growth and profitability.
- Port Network and Capacity: The company operates 15 domestic ports with a total capacity of 633 MMT and three international ports, including the under-construction Colombo Port. The flagship Mundra port and the Vizhinjam transshipment hub strengthen its strategic positioning.
- Resilience in Market Volatility: Adani Ports & Special Economic Zone demonstrated resilience with a 7 percent YoY growth in total cargo handled (332.4 MMT in FY24) and a 19 percent YoY increase in container volumes.
- Strategic Acquisitions: The company acquired Gopalpur Port and an 80 percent stake in Astro Offshore, bolstering its offshore capabilities and expanding its operational scope.
- Strong Growth Outlook: They expect revenue, EBITDA, and net profit to grow at a CAGR of 21.4 , 19, and 21.9 percent, respectively, from FY24 to FY27, with revenue projected to reach Rs. 47,797 crore by FY27 and Net margins are expected to improve to 30.7 percent by FY27
- Capacity Expansion Plans: The company plans to double its port capacity and triple its logistics infrastructure by FY29, positioning itself to capitalize on India’s growing maritime trade.
- Operational Efficiency and Strategic Investments: Investments in renewable energy, steel, cement industries, multi-modal logistics parks, and industrial clusters enhance APSEZ’s competitive edge and coastal presence.
Key Insights
Adani Ports has a P/E ratio of 23.45, lower than the industry average of 52.93, indicating potential undervaluation. The company has PEG ratio of 0.38 suggests further undervaluation, and has promoter shareholding exceeding 65 percent.
Key Financials and Ratio’s
The company’s revenue rose by 6.04 percent from Rs 6,951.86 crore to Rs 7,372.37 crore in Q2FY24-25. Meanwhile, Net profit rose from Rs 1,747.85 crores to Rs 2,445 crore during the same period.
It has an Return on Equity (RoE) of 17.15 percent and a Return on Capital Employed (RoCE) of 12.89 percent. Furthermore, the company’s debt-to-equity ratio is 0.88.
Written by Sridhar J
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