Recently Adani Ports and Special Economic Zone Ltd (APSEZ) received approval from the National Company Law Tribunals (NCLT) to acquire the remaining 58.1% stake in the Gangavaram Port Limited (GPL). APSEZ had previously obtained 31.5% of the company from Warburg Pincus and 10.4% from the Andhra Pradesh government early this year.
A lot has been happening at APSEZ lately. Jefferies, a leading global brokerage firm interacted with the management of the ports company. It aims to leverage its robust balance sheet. It is eying slow but steady volume recovery as global container prices are getting better.
The analysts at the brokerage commented, “We raise our FY23-25E volumes by 3-7% to factor in 1QFY23 and EPS by 5-11%. Medium-term double-digit growth should continue as it replicates the Mundra market share gain story at its acquired ports.”
In addition to this, the brokerage firm added, “We hosted Adani Group CFO, Jugeshinder Singh, at our Sept. 2022 Jefferies Asia Forum. He highlighted that profitability is a focus even in international investments.”
“Adani Ports management also pointed out that they are entering global markets with strategic partners so that risk is mitigated, and they have better color on the country’s landscape to grow port operations. Their key global projects include Israel Port ( ₹85 bn capex, 70% stake) and Sri Lanka Port ( ₹53 bn capex, 51% stake),” said Jefferies.
With a capacity of handling 498 MMTPA cargo, Adani Ports and SEZ is the largest private sector port company in India. The company operates 3 logistics parks and 12 ports & terminals. In terms of land space, it has 15,000 hectares of industrial land and 4 lac sq ft of warehousing.
The brokerage house has provided a ‘buy’ rating on the stock of Adani Ports and Special Economic Zone (APSEZ) with a target price of Rs. 1,100 per share. It results in an upside of over 38% from the current market of Rs. 795 a piece.
Written by Vikalp Mishra
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