Adani Ports shares in focus on Gopalpur Ports acquisition talks report

Shares of Adani Ports & Special Economic Zone Ltd are in focus on Thursday morning amid a media report suggesting the Adani group company was in talks with Shapoorji Pallonji Group to acquire Gopalpur Ports in Odisha for up to Rs 1,100-1,200 crore in equity value.

As per the Economic Times report, SP Ports Maintenance owns 56 per cent in Gopalpur Ports, while the rest is owned by Orissa Stevedores (OSL). This acquisition, the report said, is part of the company’s "string-of-pearls strategy" that involves owning facilities in both eastern and western water margins. The due diligence process by Adani Ports is currently underway and in case the deal follows through, Gopalpur Ports will be sixth acquisition for Adani Ports in the eastern coast.

Analysts are largely positive on the prospects of Adani Ports. "We have increased our volume estimates by 2 per cent to 410 mmt for FY24. We now expect Adani Ports to register 16 per cent volume growth over FY23-25 and revenue, Ebitda and PAT CAGRs of 23 per cent, 21 per cent and 17 per cent over the same period," Motilal Oswal Securities said on Thursday.

The brokerage has retained its 'Buy' rating on Adani Ports with a revised target of Rs 1,210 based of 16 times FY25 EV/Ebitda estimates.

Also read: Adani Ports shares up 27% in 4 days. Kotak ups Ebitda estimates, suggests fair value for stock

Kotak Institutional Equities in a separate note this week increased its Ebitda estimates for the Gautam Adani-led company by 5-6 per cent, accounting for likely higher volume growth for Mundra, Dhanraj and Ennore ports. Kotak is expecting Adani Ports to log 9 per cent volume CAGR (compounded annual growth rate) for Mundra, 10 per cent per cent for existing ports and 15 per cent volume CAGR for the overall portfolio over FY2023-26.

Kotak said it sees Ebitda CAGR for Adani Ports at 21 per cent on the back of realisation growth and margin expansion. This brokerage sees Rs 1,060 as a fair value for the stock.

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