Adani Ports shares surge 6% to hit one-year high on strong Q3 results; see brokerage views

Shares of Adani Ports & Special Economic Zone Ltd (Adani Ports) soared 5.58 per cent to scale their one-year high level of Rs 1,287 as the company recorded a strong set of numbers in the third-quarter of the ongoing financial year 2023-24 (FY24).

The country's largest private port operator posted a nearly 68 per cent surge in Q3 FY24 profit, helped by a jump in cargo volumes and higher tariffs. Consolidated net profit rose to Rs 2,208 crore in the October-December quarter, the company said.

Revenue from operations rose 44.6 per cent to Rs 6,920 crore in the quarter, boosted by a 44 per cent growth in cargo volumes.

Adani Ports' volume handling capacity has grown four-fold since 2011 as the country's exports and imports surge. The company operates 13 ports and terminals in India, including the largest container handling port in Mundra in the western state of Gujarat.

Nuvama Institutional Equites has upped its target on the Adani group stock to Rs 1,415 from Rs 958. The domestic brokerage said the FY24 guidance upgrade suggested the growth momentum is accelerating and, thus, it upped FY24 and FY25 earnings estimates for Adani Ports by 13 per cent and 18 per cent, respectively.

The domestic brokerage said Adani Ports reported its highest-ever cargo volumes of 311 mmt for the nine months ended December 31, and revised up its guidance to 400 mmt for FY24 against the earlier guidance of 370–390 mmt). Adani Ports also achieved its highest ever rail (22 per cent) and GPWIS (46 per cent) volumes in 9MFY24. Net debt-to-Ebitda stood at 2.5 times (targeted level) versus 3.1 times at end-FY23.

"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 stated.

Nuvama noted that Adani Ports' logistics business continued to outpace peers with a total of 10 MMLPs (Multi-Modal Logistics Parks), and two more to come.

JM Financial said it has raised its estimates by 3-5 per cent to reflect the Q3 FY24 performance and improved outlook. The broking firm suggested a one-year target price of Rs 1,430.

Also read | Paytm shares plunge 20%, now below Rs 500. What analysts say

Also read | BLS E-Services IPO allotment status: Check application, latest GMP and listing date