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Adani Ports and Special Economic Zone Ltd. (APSEZ) are now among the few stocks on the Street that do not have a sell rating on the stock. As many as 15 of the 17 analysts covering the stock have a ‘Buy’ rating on the stock, while the other two have a ‘Hold’ rating.
The port control arm of the power-to-cement Adani Conglomerate reported September quarter results a day earlier, which largely met analyst estimates. The company said it is “well positioned” to hit the high end of its core earnings forecast for fiscal 2025.
India’s largest private port operator by volumes reiterated its fiscal 2025 cargo volume forecast between 460 million tonnes (MMT) and 480 MMT after volumes rose 10% in a quarter.
Brokerage firm Nuvama Institutional Equities said Adani Ports has consistently achieved healthy growth across all parameters. Furthermore, the planned capacity expansion is expected to further boost volumes and in turn drive revenue and margin expansion.
According to Nuvama, the port-side acquisition, along with multiple capacity creation in the logistics sector, is expected to provide multi-year growth prospects for the Adani group company.
The brokerage expects revenue, EBITDA and profit to grow at a CAGR of 13%, 15% and 21% respectively in FY24-27.
Nuvama values the shares at 20 times the estimated December 2026 Enterprise Value-Ebitda to arrive at an unchanged target price of ₹2,000 per share. The brokerage has a ‘Buy’ rating on the counter.
Morgan Stanley maintains the ‘Overweight’ rating for Adani Ports and increases its price target to ₹1,648 per share.
The brokerage wrote in its note that the company’s balance sheet and cash flows remain strong, reiterating FY25 guidance.
Port revenues and EBITDA rose 10% and 13% respectively (Morgan Stanley estimates were 11% for both).
Logistics revenue increased by 22% (Morgan Stanley estimate: decrease of 5%), while logistics EBITDA increased by 7% (estimate: decrease of 37%).
Net debt/EBITDA improved to 2x (vs. 2.3x FY24 forecast).
CLSA has an ‘Outperform’ rating on Adani Ports, with a price target of ₹1,764 per share, citing multiple strategic moves and progress in deleveraging.
In the first half of fiscal 2025, Mundra traffic increased by more than 18% year-on-year, compared to a 9% increase across all ports.
In the second quarter, a diversified mix drove results, with a rebound in Mundra and a recurring PAT increase of 11% year-on-year.
UBS maintains a ‘Neutral’ rating on the counter and a price target of ₹1,700 on consecutive flat results. The ports of Colombo and Vizhinjam could provide positive surprises, the report said.
The brokerage mentioned that container volumes are the key growth driver, but Gangavaram port remains below trend for the second quarter. Coal volumes are stable, while logistics are growing.
Shares of Adani Ports are currently trading 1.15% higher at ₹1,388.50 each on NSE. The stock is up 33% so far in 2024.