Synopsis: Brokerage firms remain optimistic about Adani Ports & Special Economic Zone (APSEZ) following the company's impressive financial results for the quarter ending June 30, 2024. The company reported significant growth in net profit and revenue, which exceeded market expectations.
Adani Ports & Special Economic Zone (APSEZ) has garnered positive sentiment from brokerage firms after reporting robust financial results for the quarter ending June 30, 2024.
The Adani Group's blue-chip port operator managed to surpass market expectations with its impressive performance, leading to continued optimism among analysts.
The company's consolidated net profit for Q1 FY25 saw a remarkable 47% year-on-year (YoY) increase, reaching Rs. 3,113 crore.
This growth was fueled by a rise in revenues and a Rs. 600 crore gain from the disinvestment of a stake in a container terminal subsidiary.
Revenue from operations for the quarter stood at Rs. 6,956 crore, reflecting an 11% YoY growth from Rs. 6,247.6 crore in the same period last year.
EBITDA for Q1 FY25 grew by 29% YoY to Rs. 4,847 crore, with margins expanding by 400 basis points to 64%.
Analysts have praised APSEZ's balanced port mix on both the western and eastern coastlines of India, expecting the company to achieve 2-3 times the country's cargo volume growth.
Motilal Oswal Financial Services remains bullish on APSEZ, expecting the company to outpace India's overall growth.
They forecast a compound annual growth rate (CAGR) of 14%, 15%, and 22% in revenue, EBITDA, and profit after tax (PAT) respectively, over FY24-26. Motilal Oswal has reiterated its 'buy' rating with a revised target price of Rs. 1,850.
The market responded positively to APSEZ's performance, with the stock settling at Rs. 1,589.40 on Thursday, up 1.25% for the day.
On Friday, the shares opened slightly lower at Rs. 1,588.85, with a market capitalization just below Rs. 3.45 lakh crore.
In Q1 FY25, APSEZ handled a total volume of 109 MMT, marking a 7.6% YoY increase.
Notably, Mundra port volumes grew by 23% to 51.1 MT.
Nuvama Institutional Equities expects revenue, EBITDA, and PAT to grow at a CAGR of 14%, 16%, and 24% respectively over FY24-27E.
They have revised their target price to Rs. 2,000, maintaining a 'buy' rating with a 26% upside potential.
Global brokerage firm Jefferies commended APSEZ's operational performance, noting that EBITDA met expectations due to margin expansion.
They emphasized the company's focus on capex prudence and potential in the logistics sector.
Jefferies has maintained its 'buy' rating, increasing its target price from Rs. 1,640 to Rs. 1,910.
Goldman Sachs and HSBC also retained their 'buy' ratings, adjusting their target prices to Rs. 1,630 and Rs. 1,800 respectively, following APSEZ's Q1 results.
Both firms highlighted the positive management commentary and strong outlook for future growth.
In conclusion, Adani Ports & Special Economic Zone has delivered an outstanding performance in the first quarter of FY25, surpassing market expectations and securing positive reviews from brokerage firms.
With robust growth in net profit, revenue, and operational efficiency, APSEZ is well-positioned for continued success.
Analysts remain optimistic, maintaining 'buy' ratings and raising target prices, reflecting confidence in the company's future growth trajectory.
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