December 16, 2016 / 16:17 IST
We attended an analyst visit to Dhamra port arranged by Adani Ports (ADSEZ) and came away extremely impressed by the waterfront/ cargo handling/ rail evacuation infrastructure. Management expects 30% volume growth (last year) to sustain (100 MT in 5-7 years), driven by inbound cargo (66 MT: Coking/ thermal coal, limestone) and outbound cargo (34 MT – primarily coastal coal). Achieving the target is contingent on very strong demand – unlikely that cannibalizing volumes from other ports would drive 30% volume CAGR for 5 years.
Outlook
We increase our volume growth estimate for Dhamra to 20% for FY18 (10% earlier) and value it at 15x EV/EBITDA (slight premium to current EV/EBITDA of ADSEZ [13x], considering higher growth). We maintain our BUY rating with revised TP of Rs 330 (Rs 320 earlier).
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