Adani Ports shares@ Rs 2,000? Here are fresh target prices for Adani group stock

Brokerage firms continue to remain positive on Adani Ports & Special Economic Zone (APSEZ) after the company reported a strong set of numbers in the quarter ended on June 30, 2024. The results of the Adani Group firm came during the market hours on Thursday managing to surpass Street's expectations.  

Brokerage firms continue to be positive on the Adani Group's blue-chip port player, citing that the results were in line and the operational performance was strong. The analysts are also swearing by the positive management commentary on the bright outlook for the future.  

Adani Ports & Special Economic Zones Ltd reported a 47 per cent year-on-year (YoY) rise in its consolidated net profit to Rs 3,113 crore for the April-June 2024 quarter (Q1FY25), thanks to rise in revenues and a Rs 600 crore gain from the disinvestment of stake in a container terminal subsidiary.  

The Adani Group-owned port operator's revenue from operations in the first quarter of the current fiscal stood at Rs 6,956 crore, registering a rise of 11 per cent, compared to Rs 6,247.6 crore in the year-ago period. Ebitda for the quarter reported a growth of 29 per cent YoY at Rs 4,847 crore, while margins expanded 400 basis points to 64 per cent.  

The Q1 performance was largely in line with our estimates. APSEZ is expected to record 2-3x of India’s cargo volume growth, driven by a balanced port mix on the western and eastern coastlines of India. The logistics business will serve as a value addition to the domestic port business, with a focus on enhancing last-mile connectivity, said Motilal Oswal Financial Services.  

"APSEZ is anticipated to outpace India's overall growth and retain our estimates for FY25/FY26. We expect APSEZ to report 11 per cent growth in cargo volumes over FY24-26. This would drive a CAGR of 14 per cent, 15 per cent and 22 per cent in revenue, Ebitda, and PAT over FY 24-26, respectively," it reiterated its 'buy' rating with a revised target price of Rs 1,850.  

Shares of Adani Ports & Special Economic Zone opened marginally lower at Rs 1588.85 on Friday, with a total market capitalization slightly below Rs 3.45 lakh crore. The Adani Group stock settled at Rs 1,589.40 on Thursday's session, up 1.25 per cent for the day.  

Adani Ports divested 49 per cent equity stake of Adani Ennore Container Terminal, a subsidiary of the company, for consideration of Rs 248.54 crore, and recorded a gain of Rs 603.27 crore in the statement of profit and loss, it said. Total volume handled at Adani Ports during Q1FY25 stood at 109 MMT, up 7.6 per cent YoY but flat sequentially.  

APSEZ’s Q1FY25 revenue grew 21 per cent YoY, led by volume growth of 8 per cent YoY and realisation growth of 5 per cent YoY Container (up 17 per cent YoY) and liquid (up 11 per cent YoY) segments propelled the growth while coal grew 2 per cent YoY, as it was hurt by disruption at Gangavaram port. Mundra port volumes grew 23 per cent to 51.1 mt, said Nuvama Institutional Equities.  

"We expect revenue, Ebitda and a PAT to grow at a CAGR of 14 per cent, 16 per cent and 24 per cent over FY24–27E. We are valuing the stock on 20x Sep-26 EV/EBITDA, with a revised target price of Rs 2,000, (earlier Rs 1,574)," it added, maintaining a buy rating and suggesting a 26 per cent upside in the stock.  

Global brokerage firm Jefferies said that operational performance was in line and Q1 Ebitda met expectations as margin expansion offset lower realizations. Capex prudence will remain at focus and logistics potential is the sweetener for the company.  

Jefferies is confident of double-digit growth and retained FY25 volume guidance of 460-480 MMT. Market share gains continue, with dedicated freight corridor commissioning at Mundra also helping the company. It has kept its 'buy' rating intact, increasing its target price of Rs 1,910 from Rs 1,640.  

Along with it, Goldman Sachs and HSBC have maintained their 'buy' rating on the stock. Both the global brokerages have revised their target to Rs Rs 1,630 and Rs 1,800 respectively, following the Q1 results.