Adani Ports shares slip 5% today; should you accumulate at current levels?

Shares of Adani Ports and Special Economic Zone Ltd fell sharply in Tuesday's trade, in line with the overall weakness in domestic benchmarks. The stock plunged 5.25 per cent to hit a day low of Rs 1,130.65. At this price, the scrip has 8.07 per cent from its one-year high of Rs 1,229.90, a level seen earlier this month on January 9. Despite the said drop, the counter has gained nearly 50 per cent in a year.

S&P Global Ratings has recently revised its outlook for Adani Ports to stable from negative on signs of robust cash flow in the next 12 to 24 months.

Adani Ports' ratio of adjusted net debt to earnings before interest, tax, depreciation and amortization - a measure of its ability to pay off liabilities - is expected to be in the range of 3x to 4x over the next two years, S&P stated.

S&P, however, said it could lower the rating on Adani Ports if it takes loans or advances outside normal business or if its ratio of funds from operations to debt stays below 15 per cent.

On the technical front, support on the counter could be seen in the Rs 1,150-1,100 zone. A fall below the mentioned range can trigger more pain. That said, immediate resistance may be found above Rs 1,210 level. An analyst suggested booking profit at current levels.

Shiju Koothupalakkal, Technical Research Analyst at Prabhudas Lilladher, said, "The stock has witnessed resistance around the Rs 1,225 zone. It has slipped to some extent due to profit booking. Near-term support is visible near Rs 1,140 and a breach below the said level could weaken the bias. Major support is maintained near Rs 1,100-1,085 zone. From current levels, a decent move above the resistance zone of Rs 1,225 level is necessary to strengthen the trend and expect for a further rise."

AR Ramachandran from Tips2trades said, "Adani Ports stock price looks bearish and also overbought on daily charts with next resistance at Rs 1,212. Investors should book profits at current levels as a daily close below support of Rs 1,143 could lead to Rs 1,023 in the near term."

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "Support will be at Rs 1,100 and resistance at Rs 1,230. A decisive close above Rs 1,230 level may trigger a further upside till Rs 1,300. Expected trading range will be between Rs 1,050 and Rs 1,350 for a month."

DRS Finvest founder Ravi Singh said, "The stock is looking weak and it may slip towards Rs 1,050 level. Resistance will be seen at Rs 1,210."

Meanwhile, Indian equity benchmarks crashed in late deals today, dragged by media, realty, state-owned lenders, energy and metal stocks.

(Disclaimer: Business Today provides stock market news for informational purposes only and that should not be construed as investment advice. Readers are encouraged to consult a qualified financial advisor before making any investment decisions.)

 

 

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