Adani Ports and Special Economic Zone Limited clocked a cargo volume of 382 million metric tonnes (MMT) in the 11 months of this fiscal (11MFY24), recording a 24% year-on-year (YoY) growth. With a monthly cargo run rate of 35 MMT, domestic brokerage firm Motilal Oswal Securities expects Adani Ports to surpass even its revised cargo volume guidance of 400 MMT during FY24.
The logistics business, Motilal said, continues to do well, with year-to-date rail volume up 21% YoY in FY24.
The domestic brokerage has maintained its 'Buy' rating on the Adani Ports stock and revised its target price to ₹1,600 per share, suggesting another 21% potential upside ahead for the counter.
Adani Ports has a diversified cargo mix along with sticky cargo and customer base, Motilal said. It continues to gain market share while generating strong cash flows and maintaining its leverage position, with a net debt-to-Ebitda ratio of 2.5 times, the brokerage said while increasing its volume estimates for the Adani Group company by 2-3% for FY24-26.
Over FY24-26, Motilal expects the port operator and logistics company to register a 10% volume growth and a CAGR of 15% in sales, 16% in Ebitda and 18% in profit after tax.
| Brokerages | View | TP |
| Motilal Oswal | Buy | ₹1,600 |
| HSBC | Buy | ₹1,560 |
| Citi | Buy | ₹1,564 |
Global broking firm HSBC has also assigned a 'Buy' rating on the Adani Ports stock, saying robust throughput growth continued in February 2024. It said the company is on track to beat its 400 MMT target for FY24.
Given that the company continued its strong growth in February, HSBC has raised its EBITDA forecasts for Adani Ports by 1-4% for FY24-26, implying a 19% CAGR.
The foreign brokerage has raised its target price to ₹1,560 from ₹1,370 per share, with a potential upside of 18%.
Citi Research, meanwhile, in its note said the company is well positioned to grow reasonably faster than industry due to its presence across both coasts of India.
Citi has a 'Buy' recommendation on the counter with a target price of ₹1,564, implying a further upside of 11.7% from the current market levels. Adani Ports remains Citi's top pick in India infrastructure space.
"A big part of the strategy is to grow sticky cargo by providing customised services — customised infrastructure at ports, dedicated inland logistics such as trains and multi-modal logistics parks — and strategic joint ventures with large customers in global shipping lines," the brokerage noted.
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