Buy Adani Group Stock For 21% Returns, Gave 113.93% In 3 Yrs, Revenues Grew 33% YoY: ICICI Direct

Adani Ports and Special Economic Zone Limited (APSEZ), a leading large-cap company of Adani Group in a recent report by ICICI Direct has been rated 'buy' for gains up to 21% with a target price of Rs 1,000 apiece. It has a market cap of Rs 1,75,221 crore.

Adani Ports and Special Economic Zone (APSEZ) is the largest commercial port operator in India with 25% share of port cargo movement in India. The company has evolved from a single port dealing in a single commodity to an integrated logistics platform. Total ~70% of APSEZ's revenues is contributed by its port operations. Rest is led by harbour (11%), logistics (7%) and others. In FY22, container, bulk, liquid mix were at 36%, 55%, 9%, respectively.

Stock Outlook & Returns Over The Past 5 Years

The last traded share price of APSEZ is Rs 833.85 per share, 0.05% up as compared to its previous close of Rs 833.40 per share. The stock's  52-week low is Rs 651.95 apiece recorded on 24 February 2022, and the 52 week high is Rs 987.85 apiece recorded on 20 September 2022 apiece, respectively.

Over the week, the stock gained 1.54%. Whereas, in the past 1 and 3 months, it gave a positive return of 6.3% and 3.3%, respectively. Over the past 1 year, it gave a positive return of 17.57%. In the past 3 years, the stock gave a multibagger return of 133.93%. In the past 5 years, the stock gave 91.74% positive returns on investments.
 

Q2FY23 Results

Higher realisation vs estimates, lifted operational performance. Revenues grew 33% YoY to Rs 5211 crore (15% volume growth supported by 18% realisation growth). Absolute EBITDA grew 31% to Rs 3260 crore (margins remained range bound at 62-63% levels - higher realisation negated by change in product mix). PAT grew 69% to Rs 1678 crore due to exceptional loss in base quarter.

ICICI Direct Remains positive, Suggest Buy for Rs 1000 target price

Strong organic growth coupled with efficient assimilation of inorganic acquisition into APSEZ fold (margin improvement) and integrating logistics operations both vertically and horizontally, has built a strong moat around the business. "We remain positive on the long term growth prospects of the stock and maintain our BUY recommendation. We value the stock at Rs 1000 on an SOTP basis," the brokerage has said.

Key triggers for future price performance

As APSEZ embarks on becoming India's largest integrated transport utility company by 2030, it is strengthening its capabilities in all logistics segments (ports, CTO, warehousing, last mile delivery, ICDs, etc) Hence, it will offer end to end service to its customers thereby capturing higher wallet share and also making the cargo sticky in nature.

DFC connectivity to Mundra (normalisation in the medium term) to provide faster port evacuation, quicker transit time. Inorganic opportunities such as acquisition of Concor [~67% market share (MS) in CTO business].

Disclaimer

The stock has been picked from the brokerage report of ICICI Direct. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before making any investment decision.