Global brokerages remain bullish on Adani Ports after Q2 numbers, see over 20% upside

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26 Aug, 2025 12:21

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Global brokerage houses remain bullish on Adani Ports and Special Economic Zone even though the stock fell nearly a percent intraday on November 13. The drop came after the company’s second-quarter earnings, reported November 11, fell short of expectations.

While retaining an outperform call on the stock, Macquarie raised its target price to Rs 496 from Rs 470, implying 28 percent potential upside from current levels.

It also raised company's FY20-22 EPS estimates by 5-6 percent, saying the balance sheet had ample headroom to fund expansion and acquisitions.

Adani Ports lowered its volume guidance to 224-228 mmt for FY20 at 8-10 percent growth but was confident about meeting that guidance. "Cargo diversification in bulk, break-bulk and gas will give resilience," the brokerage said.

The company’s consolidated net profit grew by 72.4 percent year-on-year to Rs 1,059.2 crore, driven by tax write back of Rs 172.9 crore after the government cut the corporate tax rate and higher other income, up 61 percent, in the quarter.

Consolidated revenue from operations increased 8.2 percent to Rs 2,821.2 crore in Q2 YoY and at operating level, its earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 15.7 percent to Rs 1,311.1 crore and margin expanded by 310bps YoY to 46.5 percent during the quarter.

Numbers were lower than analysts’ estimates. Revenue was estimated at Rs 2,940 crore and EBITDA was expected at Rs 1,800 crore with margin at 61 percent for the quarter, according to an average of estimates of analysts polled by CNBC-TV18.

Credit Suisse also maintained its outperform call on the stock, with a target price of Rs 480, implying 24 percent potential upside from current levels as cash flows and balance-sheet remained strong and valuations reasonable.

Inorganic opportunities could drive the next phase of growth, though there was near-term weakness due to lower coal and crude, the brokerage said, adding the container business had retained growth momentum and Dhamra had recovered with rake availability.

Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.