JM Financial raises target price for Adani Ports after Gopalpur Port acquisition

JM Financial has increased its target price of Adani Ports & Special Economic Zone (Adani Ports) after the Adani Group company announced acquisition of 95 per cent stake in Gopalpur Port in a Rs 3,350 crore deal. The company informed about the same through an exchange filing on Tuesday.

Gautam Adani led Adani Ports has expanded its presence on India’s coastline after buying 95 per cent in Odisha’s Gopalpur Port (GPL) at an enterprise value of Rs 3,080 crore. The deal is expected to be completed in the first quarter FY25. In addition to the enterprise value, there is a contingent consideration of Rs 270 crore estimated to be payable after 5.5 years.

GPL is a bulk port, located on the East coast of India with 20 million ton per annum (mtpa) handling capacity, 30-year concession, which is expandable up to 2056 and over 500 acres of leased land parcel, said JM Financial. GPL acquisition, though a small one, will be the sixth port on the east coast and will further deepen its reach in the long term, it said.

The sale of GPL is the second port divestment in the past few months from the SP group, a diversified construction and infrastructure, real estate and energy conglomerate. It had earlier divested its Dharamtar Port in Maharashtra to JSW Infrastructure for an enterprise value of Rs 710 crore.

Shares of Adani Ports rose more than 3 per cent to Rs 1343.35 on Wednesday, commanding a total market capitalization of close to Rs 3 lakh crore. The scrip had settled at Rs 1304.05 in the previous trading session on Tuesday. The stock has rallied more than 135 per cent from its 52-week lows at Rs 571.35.

"Adani Port's expertise in ramping up volume and improving EBITDA margins through cost/ operational efficiencies and de-bottlenecking, we believe GPL will be a value accretive acquisition for the company, We bake in GPL acquisition in estimate with revise March 2025 target price to Rs 1,460, from Rs 1,430 earlier," JM Financial added, maintaining a 'buy' call on the stock.

 

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.