Adani Ports and SEZ (ADSEZ) Experiences Robust Q4 Growth, Motilal Oswal Elevates Target Price

• Adani Ports and SEZ (APSEZ) has received a revised target price of ₹1,550 from brokerage firm Motilal Oswal following a strong performance in the March quarter.
• The firm has maintained its ‘buy’ rating on the Nifty-listed stock, citing a 19% YoY revenue growth to ₹68.9 billion in 4QFY24.
• APSEZ’s cargo volumes also saw a significant increase, recording a 26% YoY growth to reach 108.8 MMT.

Adani Ports and SEZ’s robust Q4 performance prompts Motilal Oswal to raise its target price to ₹1,550, maintaining a ‘buy’ rating on the stock. The firm anticipates APSEZ to outpace India’s overall growth due to its balanced port portfolio and operational enhancements.

APSEZ’s Q4 Performance and Future Projections

APSEZ reported a revenue growth of 19% YoY to ₹68.9 billion in 4QFY24. The quarter also saw a 26% YoY growth in cargo volumes to reach 108.8 MMT. The firm believes that APSEZ’s performance aligns closely with their projections, with the company expected to achieve cargo volume growth 2-3 times that of India’s. This growth is attributed to a well-balanced port portfolio along both the western and eastern coastlines, coupled with operational enhancements at recently acquired ports.

Logistics Segment and Growth Outlook

The logistics segment is expected to complement the domestic ports business by improving last-mile connectivity. Over the period spanning FY24-26, Motilal Oswal foresees APSEZ reporting an 11% increase in cargo volumes, resulting in a Compound Annual Growth Rate (CAGR) of 14%, 15%, and 19% in revenue, EBITDA, and Profit After Tax (PAT), respectively.

Other Brokerage Firms’ Outlook on APSEZ

Other than Motilal Oswal, brokerage firm Jefferies has also raised the target price of the Adani stock to ₹1,640, stating that the Q4 EBITDA fell short of expectations by 5% due to slightly lower realizations. However, the management’s remarks conveyed confidence in achieving double-digit growth. Brokerage company HSBC has also hiked the target price to ₹1,560 for Adani Ports.

Conclusion

With a strong Q4 performance and promising growth projections, Adani Ports and SEZ continues to be a strong contender in the market. The revised target price and maintained ‘buy’ rating from Motilal Oswal further solidify its position. The company’s balanced port portfolio and operational enhancements are expected to drive its growth, outpacing India’s overall growth.