Aniket PujariAdani Ports & Special Economic Zone share price: Macquarie Equity Research has given a target price of ₹1500 for the stock that is trading at close to ₹1117 Levels. This indicates an upside of 34%.
As per analysts Adani Ports & Special Economic Zone (ADSEZ) is in a sweet spot to benefit from India’s long-term economic potential.
A diversified port and cargo mix support resilience of Adani Ports & Special Economic Zone as per Macquarie; the increasingly integrated nature of logistics offerings should aid further customer lock-in. Also visibility of healthy recurring operating cash flows remains high, supported by mix and customer partnerships. Macquarie has Initiated Coverage with an Outperform, rating
3 Key reasons why Macquarie is Bullish on Adani Ports
1.Pole placement at ports; expedited logistics: ADSEZ is India’s key port operator and aims to grow at twice the rate of the country’s cargo volume. Macquarie beleives that the diversity of cargo handled, the locations of its ports, hinterland connectivity, customer partnerships, and its early mover advantage are favorable factors. Another encouraging factor is the network impact of a quickly expanding logistics company. A 40–45% revenue CAGR over FY25–29 is the management’s goal for the company’s logistics division (inland transportation, warehousing, etc.).
2. Investing for expansion: ADSEZ intends to spend ₹80,000 Crore on in capital expenditures over FY25–29 to expand its domestic organic business (compared to ₹42,000 crore during FY15–24). This covers logistics (Rs20000-25000 crore) and domestic ports (Rs45000-50000 crore). Additionally, ADSEZ will assess prospects for port expansion abroad. By 2030, it targets 800-850MMT domestic cargo volume, implying ~11% domestic cargo CAGR over FY24-FY31.
3, Good cash flow equates to plenty of firepower for expansion.
Over FY20–24, ADSEZ’s average operating Cash flows to EBITDA was greater than 75%. Given an in-port cargo mix of more than 50% sticky cargo and ongoing diversification initiatives, Macquarie anticipates that cash-flow production will continue to be robust. As of the third quarter of FY25, net debt to trailing twelve months to EBITDA is a comfortable 2.1 times
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.
