Adani Ports up as Goldman Sachs sees 25% upside

Shares of Adani Ports and Special Economic Zone were trading almost two percent higher on April 6 afternoon after Goldman Sachs maintained its “buy” rating on the stock with a target price of Rs 810, implying a 25 percent upside from the current market price.

At 12.35 pm, the stock was up 1.6 percent at Rs 646.45 on the BSE.

Volumes recovered in March 2023, the global brokerage firm said in report on April 6, adding the full-year volume for FY23 would be at 339 MT as compared to its estimate of 337 MT.

The report came out a day after Adani Ports recorded a 9 percent YoY growth, the largest port cargo volumes ever.

“With approximately 339 MMT in FY23 (April 2022 – March 2023), APSEZ (Adani Ports) recorded its largest port cargo volumes ever – which is a good about 9 percent Y-o-Y growth,” the company said in an exchange filing.

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Adani Ports has been continuously increasing its market share for the past years, outperforming all of India’s cargo volume growth, it added.

The integrated transport utility company handled around 32 MMT of total cargo in March 2023, a 9.5 percent growth. For the first time since July 2022, the volumes crossed the 30-MMT mark.

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The overall container volumes handled by the company in India jumped to around 8.6 MTUs, up over 5 percent YoY, including about 6.6 MTEUs at the Mundra port alone.

It continues to be India’s largest seaport with approximately 155 MMT of total cargo handled during the year. The logistics business segment also had a record year, the Adani group company added.

The company recently acquired Karaikal Port for Rs 1,485 crore through NCLT route. Morgan Stanley said that the port handled 10 MMT in FY23. The revenue from this port had declined between FY20 and FY22.

The foreign brokerage said EBITDA per tonne is Rs 186 as compared to Adani Ports’ Rs 292 for FY22. Profit improvement over next two years could make it a value-accretive transaction, it added.

Even Morgan Stanley has an “overweight” stance on the company’s stock with the target price at Rs 690.