Motilal Oswal positive on Adani Ports after Sensex inclusion; increases target price
Motilal Oswal positive on Adani Ports after Sensex inclusion; increases target price
Motilal Oswal Financial Services continues to remain positive on Adani Ports & Special Economic Zone Ltd (Adani Ports) as it sees the healthy expansion in the scale of operations and robust profitability to continue for the Adani Group's port operator, which recently made its entry in the BSE's benchmark Sensex.
The domestic brokerage firm said that Adani Ports ended FY24 on a strong note with more than 20 per cent volume growth. The outlook remains bright, and growth momentum is likely to sustain as APSEZ continues to gain market share from other operators and grow at twice the industry growth rate, said Motilal Oswal.
"Adani Ports invested significantly in FY24 to expand its portfolio, cementing its position as India’s largest private port player and integrated logistics provider. The company strengthened its presence on the eastern coast by inking a definitive agreement to acquire a 95 per cent stake in Gopalpur Port. The port has a capacity to handle 20 MMTPA," it said.
Shares of Adani Ports settled at Rs 1,475 on Monday, falling marginally for the day, commanding a total market capitalization of close to Rs 3.2 lakh crore for the day. The stock has rallied about 110 per cent from its 52-week low at Rs 708 apiece.
Adani Ports successfully scaled up its operations at Karaikal Port and commenced commercial operations at the Dhamra LNG Terminal. Its Haldia terminal is expected to be operational in FY26, said the brokerage.
"Adani Port's upcoming deep-water international seaport in Vizhinjam, which is expected to be operational by 2QFY25), being developed through a public-private partnership, will transform maritime trade for India, handling ultra-large ships and diverting traffic from the Colombo Port," Motilal said.
Adani Ports became a part of Sensex index, where the Adani Group firm replaced Wipro Ltd in the 30-share pack in its latest rejig on June 27. The company was included among the bluechip pack leaving Adani Enterprises and others behind in the inclusion race.
Adani Ports, as an integrated transport utility company, has built up its logistics assets base, comprising trains, multi-modal logistics parks (MMLPs), rail tracks, warehousing, and an inland container depot, thus building operational synergies. This one-stop solution service has led to a robust volume CAGR of 15 per cent over FY19-FY24, the report added.
"We expect Adani Ports to record an 11 per cent volume growth and a revenue, Ebitda and PAT CAGR of 14 per cent, 15 per cent and 19 per cent over FY24-26. Driven by consistent outperformance in cargo volumes," added Motilal Oswal, reiterating 'buy' rating with a revised target price of Rs 1,700.
Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
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