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Adani Ports shares fall as Norway's Norges Bank to cut-off Adani Group firm

Adani Ports shares fall as Norway's Norges Bank to cut-off Adani Group firm

Adani Ports was under observation since March 2022, and the decision for exclusion is based on a recommendation from the Council on Ethics of November 21, 2023.

Pawan Kumar Nahar
Pawan Kumar Nahar
  • Updated May 17, 2024 10:17 AM IST
Adani Ports shares fall as Norway's Norges Bank to cut-off Adani Group firmShares of Adani Ports and Special Economic Zone Ltd tumbled more than 1.8 per cent to Rs 1,320.55 on Friday.

Shares of Adani Ports and Special Economic Zone Ltd (APSEZ) dropped during the trading session on Friday as Norway's central bank Norges Bank has blacklisted Adani Group firm and two other entities from its portfolio citing ethical concerns.
 

Norway's Norges Bank manages the Sovereign Wealth Fund, the world's largest sovereign wealth fund, announced that its executive board has decided to exclude India's Adani Ports from its government pension fund, pointing to the risk that operator contributes to 'serious violation of individuals' rights in the situation of war or conflict.
 

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Following the update, shares of Adani Ports and Special Economic Zone Ltd tumbled more than 1.8 per cent to Rs 1,320.55 on Friday, with the company's total market capitalization holding about Rs 2.88 lakh crore. The scrip had settled at Rs 1,344.75 in the previous trading session.
 

Adani Ports was under observation since March 2022, and the decision for exclusion is based on a recommendation from the Council on Ethics of November 21, 2023, said Norges Bank. The other two companies blacklisted by Norges Bank include US-based L3Harris Technologies and China's Weichai Power.
 

The recent weakness in Adani Ports has observed support around its 100-day moving average (DMA) set at Rs 1,250 level, as per the daily charts, said Avdhut Bagkar, Derivatives & Technical Analyst, at StoxBox
 

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"Thus, until this support mark is defended, the price action is anticipated to scale higher levels in the following sessions. The next major move is projected to occur over Rs 1,400, which seems to act as an immediate barrier. Once this mark is crossed, the price is set to reach Rs 1,550 mark" he said.
 

Adani Ports, the largest ports operator, reported a consolidated net profit of Rs 2,040 crore for the quarter ended March 2024, registering a growth of 76.2 per cent on a year-on-year (YoY) basis. The Adani Group firm clocked a revenue from operations of Rs 6,896.5 crore, up 19 per cent YoY.
 

At the operational level, Ebitda for the quarter increased 24 per cent to Rs 4,045 crore, while Ebitda margin improved to 58.6 per cent. from 56.4 per cent. With incremental cargo volumes of 100 MMT achieved in less than two years, APSEZ is well poised to achieve 500 MMT of cargo volumes in 2025.
 

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BNP Paribas said that capex would increasingly be aligned for transforming Adani Ports into an integrated logistics play It included Gopalpur acquisition in its valuation at its acquisition price. This is offset by lower Ebitda estimates for the logistics segment resulting in a target price of Rs 1,562. Slowing "EXIM trade volumes and worsening of Adani Group leverage metrics are the key investment risks," it said.
 

The company reiterated its calibrated growth approach, particularly emphasising on the logistics business, said JM Financial. "We tweak our FY25-26EPS by 2-3 per cent to reflect 4QFY24 performance and improved outlook. We value APSEZ at 18 times EV/Ebitda and arrive at March 2025 target o fRs 1,660," it added with a buy rating after Q4 results.

 

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.

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.
Published on: May 17, 2024 10:17 AM IST
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