Axis Direct's research report on
Port EBITDA of Rs 12 bn (up 30% YoY) was driven by 17% YoY volume growth to 43 MT. While cargo at flagship Mundra port grew 5% YoY, newer ports (Dahej, Hazira and Dhamra) reported stellar growth of 30%+ YoY. Results were boosted by SEZ income of Rs 2 bn and incentive income (0.6 bn in H1). Management mentioned that incentive income would continue in future – we consider the same in our estimates.
Reduction in Loans & Advances to related parties by Rs 10 bn (from Mar’ 16) was a major positive – as a result gross debt reduced by Rs 14 bn (vs. Mar’ 16).Adani Ports (ADSEZ) management maintained there would be further reduction of Rs 15 bn by Mar’ 17. We consider the same in our estimates and adjust volume numbers to factor in stellar performance at the newer ports. We raise our TP to Rs 320 (Rs 295 earlier). However, post recent sharp run-up in the stock, we believe near term upside is limited and have a HOLD rating now. For all recommendations, click here
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