Adani Ports stock slumps despite 'overweight' call from Morgan Stanley; shares rise 114% in a year

In the last one year, Adani Ports stock has soared 114 percent, more than doubling investors' money.

Shares of Adani Ports and Special Economic Zone (ASPEZ) slumped 8 percent on June 4 on account of profit booking. The correction comes even as Morgan Stanley put an 'overweight' call on the stock with a target price of Rs 1,517 per share.

The bullish call comes after the Adani group firm informed that it acquired a container terminal at Tanzania Port through a consortium joint venture (EAGL), securing a 95 percent stake for $39.5 million.

Adani Ports' wholly owned subsidiary Adani International Ports Holdings Pte Ltd (AIPH) signed the 30-year concession agreement with the Tanzania Ports Authority to operate and manage Container Terminal 2 at the Dar es Salaam Port in Tanzania.

The Dar es Salaam Port is a gateway port with a well-connected network of roadways and railways, Adani Ports and Special Economic Zone (APSEZ) said in a statement.

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East Africa Gateway Ltd (EAGL) has signed a Share Purchase Agreement for the acquisition of a 95 percent stake in Tanzania International Container Terminal Services Limited (TICTS) from Hutchison Port Holdings Limited (and its affiliate Hutchison Port Investments Limited) and Harbours Investment Limited for a purchase consideration of $39.5 million.

CT2, with four berths, has an annual cargo handling capacity of 1 million TEUs (twenty-foot equivalent units) and managed 0.82 million TEUs of containers in 2023, estimated to be 83 percent of Tanzania’s total container volumes,” APSEZ informed in a regulatory filing. According to APSEZ’s disclosure to stock exchanges, TICTS’ turnover in 2023 was $43.7 million.

“The signing of the concession for Container Terminal 2 at Dar es Salaam Port is in line with APSEZ’s ambition of becoming one of the largest port operators globally by 2030,” said Karan Adani, Managing Director, APSEZ.

Morgan Stanley in its report noted that cargo volumes for Adani Ports remained flat on-year in May 2024 but showed a 5 percent increase year-to-date FY25. However, the shutdown of Gangavaram Port resulted in a volume loss of 6 million metric tonnes in April-May 2024.

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Shares of Adani Ports ended 10.6 percent higher at Rs 1,590.00 on the National Stock Exchange (NSE). So far this year, the stock has rallied 51 percent, outperforming benchmark Nifty 50 which has risen around 7 percent during this period. In the 12 months gone by, Adani Ports stock has soared 114 percent, more than doubling investors' money.

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