1:5 Split, Rs 36.3/Sh Dividend: Adani Stock Up 700% In Long Run; 3 Brokerages Say BUY, Highest Target Rs 1,758

Port-to-power conglomerate Adani Group's cash cow, Adani Ports has surpassed its FY24 guidance in handling cargo volumes, while continuously gaining market share gains and generating robust cash flows. Since late March of last year, Adani Ports has been a darling stock of global investors especially GQG who recently increased its stake in the company in Q4. YTD, Adani Ports share price has risen by over 28%.

On BSE, Adani Ports' share price ended at Rs 1343.65 apiece, with a market cap of Rs 2,90,247.07 crore. Adani Ports is among the top 3 most valued stocks of the Adani Group.

In a month, Adani Ports share price has gained by 6% on BSE, while in six-months, the upside is around 67%. So far in 2024, the stock is up by 28%. But in a year, Adani stocks rallied by a whopping 102.08% as of now.

Notably, Adani Ports' share has multiplied investors' money impressively since it first turned ex-split. Adani Ports has carried 1 stock split. Effective from September 23, 2010, 1 equity share of Adani Ports with a face value of Rs 10 each has been split into five equity shares with a face value of Rs 2 each. This is a ratio of 1:5 stock split. The stock price of Adani Ports has been adjusted accordingly.

On the ex-split day, this Adani stock was at Rs 165.65 apiece on BSE. Since then, the stock has skyrocketed by a whopping 711.4% on BSE.

Also, Adani Ports holds a consistent dividend payout record. Since 2010, Adani Ports has delivered up to Rs 36.3 dividend per share cumulatively. From 2022 to 2023, Adani Ports have paid dividends of up to Rs 5 per share each year.

Currently, Adani Ports' 52-week high and low are at Rs 1,425 apiece and Rs 650.05 apiece respectively.

There is a potential upside of nearly 31% in Adani Ports share going forward. The highest target price is set by global brokerage CITI after its FY24 business performance announcement.

Citi maintained BUY on Adani Ports while raising its target price to Rs 1,758 per share from earlier Rs 1,564 per share. The outlook is given as Positive.

Adani Ports has announced that it has handled 420 MMT (+24% Y-o-Y) cargo in FY24 (including international ports), with domestic ports contributing Over 408 MMT cargo. It has also handled its highest-ever monthly cargo volumes (incl. international ports) of over 38 MMT in March 2024. Ten of our ports and terminals handled record cargo volumes: Mundra 180 MMT, Tuna 10 MMT, Hazira 26 MMT, Mormugao 5 MMT, Karaikal 12 MMT, Ennore 13 MMT, Kattupalli 12 MMT, Krishnapatnam 59 MMT, Gangavaram 37 MMT and Dhamra 43 MMT.

During FY24, more than one-fourth of all India cargo volumes were routed through APSEZ ports. This significant contribution by APSEZ underscores its active role in driving India's growth trajectory. It also shows that India's largest port operator comfortably surpassed its cargo volume guidance of 370 MMT - 390 MMT provided
at the start of the financial year.

As Motilal Oswal had predicted Adani Ports has now surpassed its revised cargo volume guidance of 400
MMT during FY24. Motilal also said, "It continues to gain market share while generating strong cash flows and maintaining its leverage position, with a net debt-to-EBITDA ratio of 2.5x as of Dec'23."

Accordingly, Motilal's note added, "We increase our volume estimates by 2-3% for FY24-26. Over FY24-26, we expect APSEZ to register 10% volume growth and a CAGR of 15%/16%/18% in revenue/EBITDA/PAT. With consistent outperformance in cargo volumes, we increase the target multiple to 17x EV/EBITDA (earlier 16x) and reiterate our BUY rating with a revised TP of Rs 1,600."

Also, JM Financial has recommended buying Adani Ports after the company announced its acquisition of a 95% stake in Gopalpur Port (GPL) at an EV of INR 30.8bn (13xFY24 EV/EBITDA; 10xFY25 EV/EBITDA).

JM's note added, "GPL is a bulk port, located on the East coast of India with 20mntpa handling capacity, 30 year concession (extendable up to 2056) and over 500acres of leased land parcel. Given APSEZ's expertise in ramping up volume and improving EBITDA margins through cost/ operational efficiencies and de-bottlenecking, we believe GPL will be a value-accretive acquisition for the company."

Further, JM's note said, GPL acquisition, though a small one (less than 3% of APSEZ consolidated volumes), will be 6th port on the east coast (Dhamra, Gangavaram, Krishnapatnam, Kattupalli and Ennore) and will further deepen its reach in the long term. We bake in GPL acquisition in estimate with revised Mar'25TP INR1460 (earlier INR1430). Maintain BUY."

Adani Ports and Special Economic Zone Ltd (APSEZ), a part of the globally diversified Adani Group has evolved from a port company to an Integrated Transport Utility providing an end-to-end solution from its port gate to customer gate.

ASPEZ is the largest port developer and operator in India with 7 strategically located ports and terminals on the west coast (Mundra, Tuna, Dahej, and Hazira in Gujarat, Mormugao in Goa, Dighi in Maharashtra and Vizhinjam in Kerala) and 8 ports and terminals on the East coast of India (Haldia in West Bengal, Dhamra and Gopalpur in Odisha, Gangavaram and Krishnapatnam in Andhra Pradesh, Kattupalli and Ennore in Tamil Nadu and Karaikal in Puducherry), representing more than 26% of the country's total port volumes, thus providing capabilities to handle vast amounts of cargo from both coastal areas and the hinterland.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author or 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.