Buy Adani Ports & SEZ, target price Rs 1,780: Motilal Oswal Financial Services

Motilal Oswal Financial Services has a buy call on Adani Ports & Special Economic Zone with a target price of Rs 1,780. The current market price of Adani Ports & SEZ is Rs 1402.25. Adani Ports, incorporated in 1998, is a Large Cap company with a market cap of Rs 3,02,613.86 crore, operating in Shipping sector.

Adani Ports & SEZ's key products/revenue segments include Income from Port Services and Infrastructure Leasing Income for the year ending 31-Mar-2024.

Financials

For the quarter ended 30-09-2024, the company has reported a Consolidated Total Income of Rs 7372.37 crore, down -8.47% from last quarter's Total Income of Rs 8054.18 crore and up 6.05% from last year same quarter's Total Income of Rs 6951.86 crore. The company has reported net profit after tax of Rs 2414.01 crore in latest quarter.

Investment Rationale
According to Motilal Oswal Financial Services, Adani Ports & SEZ is continuing to gain market share while generating strong cash flows and maintaining its leverage position, with a net debt-to-EBITDA ratio of 2x as of Sep?24. The brokerage largely retains its estimates for FY26/27 and expect Adani Ports to report 10% growth in cargo volumes over FY24-27. This would drive a CAGR of 15%/15%/21% in revenue/EBITDA/PAT over FY24-27. Motilal Oswal reiterates its BUY rating with a revised target price of Rs 1,780 (premised on 18x Sep-26 EV/EBITDA).

Promoter/FII Holdings
Promoters held 65.89 per cent stake in the company as of 30-Sep-2024, while FIIs owned 15.22 per cent, DIIs 13.26 per cent.