JM Financial has initiated coverage on Adani Ports with ‘Buy’ rating and target price of 800 – a jump of about 35% from the current market price of Rs. 591. This comes after the recent controversy surrounding Gatam Adani and the Adani group of companies when US-based Hindenburg Research accused the group of fraud and misconduct.
JM Financial said in a report that Adani Ports and SEZ (APSEZ), which has 13 ports across India with a total capacity of 600 million tonnes (MNT), has successfully built/acquired assets in India and has created a platform for stakeholders. Has demonstrated its ability to create significant value. ,
Adani Ports shares closed at Rs. Compared to previous close of 590 on Feb 28 562 – up 5%. stock open at 562.05, reached a day’s high 614.60 and intraday low 552.
Meanwhile, Jefferies has also maintained a ‘Buy’ rating on the stock with a target price of 800 in the base case scenario. The brokerage expects the company’s consolidated volume CAGR to grow at 14% over FY22-25E; 13x EV/EBITDA Sept’24E. The gradual monetization of SEZ is also expected to happen over 20 years.
JM Financial reports, “Driven by aggressive expansion in Logistics (Container/Bulk/Warehousing), APSEZ is transforming into India’s largest integrated transport utility, providing end-to-end logistics solutions to its vast customer base.” sending out.”
“Mundra’s success story in gaining market share should be replicated in the acquired ports. Material inter-corporate deposits should not be looked at in the medium term. Working capital and operating leverage should continue to drive P&L growth and improve balance sheet strength,” the Jefferies report said.
APSEZ has achieved the highest market share in India over the past decade (10ppt+ in total share; 16ppt+ in container cargo) and is expected to maintain this in future with organic and inorganic growth, JM Financial said.
“We initiate coverage on APSEZ with a BUY rating and a SoTP-based Mar’24 TP of INR 800. We estimate that the CMP means 5 ports to be assigned a zero value (constitution of c.30% of the total capacity). Key Risks: Any significant slowdown in India and adverse developments in group companies.”
On 25 January, Hindenburg Research posted a report alleging fraud by Adani and said it held short positions in the company’s shares. Since then there has been a lot of volatility in the Group 10 stocks. The company has taken several steps to fight the research firm and pacify investors.
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