Buy Adani Ports and SEZ; target of Rs 1850: Motilal Oswal

Motilal Oswal is bullish on Adani Ports and SEZ has recommended buy rating on the stock with a target price of Rs 1850 in its research report dated August 01, 2024.

Broker Research

August 04, 2024 / 21:53 IST

BUY

26 Aug, 2025 12:21

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Motilal Oswal's research report on Adani Ports and SEZ

Adani Ports & SEZ (APSEZ) reported a revenue growth of 11% YoY to INR69.6b in 1QFY25 (in line). Cargo volumes grew 8% YoY to 109mmt. Volumes at Gangavaram port were affected by a worker strike in Apr-May’24; however, the operations returned to normalcy in Jun’24. EBITDA margin came in at 61% (est. 58.7%), up 90bp YoY/240bp QoQ. EBITDA grew 13% YoY to INR42.4b (in line). APAT rose 29% YoY to INR26.3b (13% beat), aided by a lower tax outgo. Port revenues grew 13% YoY to INR55.4b and EBITDA margins stood at 72% (flat YoY). Logistics revenues grew 13% YoY to INR5.6b and EBITDA margins stood at 25% (vs. 28% in 1QFY24).
In 1Q FY25, APSEZ managed ~27% of the country’s total cargo and ~46% of container cargo. APSEZ's domestic cargo volumes grew by 9% YoY, compared to 4% YoY growth in India's overall cargo volumes.

Outlook

We expect APSEZ to report 11% growth in cargo volumes over FY24-26. This would drive a CAGR of 14%/15%/22% in revenue/EBITDA/PAT over FY24-26. We reiterate our BUY rating with a revised TP of INR1,850 (premised on 20x FY26E EV/EBITDA)

For all recommendations report, click here