Adani Ports price targets: No impact of Red Sea crisis, up to 21% upside for stock likely, suggest analysts

Adani Ports & Special Economic Zone Ltd (Adani Ports or APSEZ) shares have seen price target upgrades following a strong 40-45 per cent YoY growth on key port and overall operating metrics and a 60 per cent growth in adjusted profit. Analysts said the volume growth of 24 per cent for the first nine months was broad-based across key cargo categories and with equal contribution from Mundra, non-Mundra ports and inorganic boost.

"APSEZ has not seen any meaningful impact of the Red Sea crisis nor does it consider any meaningful competitive threat to Mundra’s volumes. It highlighted how its network effect has started reflecting in higher coastal shipping volumes—contributed 4 per cent of growth in 9MFY24. We retain near-term estimates and increase FV by 4 per cent to Rs 1,400 on higher medium-term," it said.

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JM Financial said it has raised its estimates by 3-5 per cent to reflect the 3QFY24 performance and improved outlook. It now value Adani Ports at 16 times EV/Ebitda, which is 10 per cent premium to its 3-year median of 14.5 times to reflect optimism on growth prospects. The broking firm suggested at March 2025 target of Rs 1,430.

"APSEZ has also completed the sale of Myanmar assets and the acquisition of Karaikal Port. The company is mitigating the concentration risk with non-Mundra volumes contributing 46 per cent in 9MFY24 (versus 44 per cent YoY). APSEZ also indicated that so far it has not faced any volume disruption for its Haifa port in the backdrop of the geopolitical conflict thereof," Nuvama said. This brokerage has upped its target on the stock to Rs 1,415 from Rs 958.

Motilal Oswal said Adani Ports has a diversified cargo mix along with sticky cargo and customer base. The operational ramp-up at the recently acquired ports is expected to drive a 14 per cent growth in cargo volumes over FY23-26. This, it said, should drive a revenue, Ebitda and PAT CAGR of 19 per cent each over FY23-26.

"We marginally increase our estimates with improved growth outlook and reiterate our BUY rating with a revised target of Rs 1,470.

The stock was up over 4 per cent in Friday’s trade.

Goldman Sachs suggested a target of Rs 1,280, Citi Rs 1,368, HSBC Rs 1,370, CLSA Rs 1,380 and Morgan Stanley Rs 1,428.

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