1:5 Split, 20 Dividends: Adani Stock Gives 980% Returns; Motilal, 6 Others Recommend Buy, Rs 1,500 TP Highest

There were barely one or two stocks of the port-to-power conglomerate Adani Group who defied the shocks of the Hindenburg report since early 2023. Adani Ports was one of them. Adani Ports is a cash cow of the Group, a darling of global investors, coupled with a huge order book, and resilient earnings. Surprisingly, Adani Ports has been a star performer since the 2008 recession, giving more than 980%. Adani Ports also delivered dividends and turned ex-spit one time in 16 years so far.

And Adani Ports is expected to sail further ahead. 7 brokerages from domestic and international are optimistic about Adani Ports so far. These include Motilal Oswal, HSBC, Morgan Stanley, CLSA, and JM Financials among others. The highest target price for Adani Ports is Rs 1,500.

Adani Ports Share Price:

Adani Ports is a multibagger! 2024 has also been a bullish trend as the stock gained by nearly 27% on BSE, while its yearly upside is 91% as of now. But its 5-year performance makes Adani Ports a multi-bagger with gains of nearly 263%.

But since the 2008 recession, Adani Ports has rallied by a remarkable 982.75% to date. The stock price was merely at Rs 122.60 apiece on BSE on March 7, 2008.

On March 7, 2024, Adani Ports' share price stood at Rs 1,327.45 apiece, marginally up on BSE with a market cap of Rs 2,86,747.64 crore. The stock is a few rupees away from its 52-week high of Rs 1,356.50, while it is trading higher by 132.33% from its 52-week lows of Rs 571.35 apiece.

In Q3FY24, the FII/FPI raised their holdings to 14.72% from earlier 13.83%.

Adani Ports Growth:

At the latest, the company announced its operational performance for February 2024. In this month, the company handled 35.4 MMT of total cargo, implying a healthy 33% YoY growth. While most ports observed a YoY jump in volumes, Dhamra Port recorded its highest-ever monthly cargo of 4.22 MMT.

Meanwhile, for 11 months of FY24, the company has already handled 382 MMT of cargo, implying that it is well on track to surpass the 400 MMT mark before the end of the current financial year. The company achieved the milestone of surpassing the 350 MMT cargo volume mark at its domestic ports in 318 days.

Also, record growth continued in the logistics segment with YTD rail volumes of around 542,000 TEUs (+21% YoY) and GPWIS volumes of around 18 MMT (+40%).

During Q3FY24, Adani Ports' revenue grew by 45% Y-o-Y to Rs 6,920 crore, PAT increased by 65% Y-o-Y to Rs 2,208 crore, and EBITDA jumped 59% Y-o-Y to Rs 4,293 crore. In the quarter, APSEZ achieved its highest-ever quarterly cargo volume of 108.6 MMT.

Adani Ports Dividend:

Adani Ports is also among dividend-paying stocks. As per Trendlyne data, since September 2008, the company delivered up to 20 dividends. In the last 12 months, the company paid Rs 5 dividend per share.

On the current price, Adani Ports' dividend yield is at 0.38%.

Adani Ports Stock Split:

Apart from dividends, Adani has turned ex-split only once. That was on September 23, 2010, when Adani split from Rs 10 to Rs 2, a ratio of 1:5.

The company has not paid any bonuses.

Adani Share Price Brokerages Target:

In its research note, Motilal Oswal said, "APSEZ achieved a notable 2x industry growth, elevating its market share to ~25% as of Dec'23 from 10% in Mar'13. During 9MFY24, total cargo volume handled by APSEZ stood at 311 MMT (up 23% YoY), positioning the company to achieve the higher end of its FY24 volume guidance of 400 MMT."

Motilal's note further said, "As utilization and volumes continue to ramp up existing and newly acquired
ports, we expect strong growth to continue ahead. We marginally increase our estimates with improved growth outlook and reiterate our BUY rating with a revised TP of INR1,470 (premised on 16x FY26E EV/EBITDA)."

Additionally, JM Financial's note added, "The management upped its FY24 volume guidance to 400mnt plus (vs. 370-390mnt earlier; 420mnt JMFe) with similar increases in revenue and EBITDA. We raise our estimates by 3-5% to reflect the 3QFY24 performance and improved outlook. We value APSEZ at 16x EV/EBITDA (10% premium to its 3-year median of 14.5x to reflect optimism on growth prospects) and roll forward to Mar'25TP of INR1,430. We maintain BUY."

Further, HSBC has maintained buy for a target price of Rs 1,370 on Adani Ports, while Avandus has set the highest target price of Rs 1,500 alongside maintaining buy. The highest target price hints at a nearly 13% potential upside in Adani Ports in the near term.

Moreover, Citi has set a target price of Rs 1,368, CLSA recommends a target of Rs 1,380, and Morgan Stanley has suggested a target price of Rs 1,428.

All these brokerages have recommended buying while keeping a positive outlook on Adani Ports.

About Adani Ports:

Adani Ports is a part of the globally diversified Adani Group, which has evolved from a port company to an Integrated Transport Utility providing an end to-end solution from its port gate to customer gate.

APSEZ is targeting Net Zero by 2040. During 9M FY24, the company improved its energy intensity by 4% and completed a mangrove afforestation of 227 hectares. The company is on track to add 1,000 MW of new renewable capacity in 2024.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.