1 Multibagger Adani Stock Hits New High; Turns Rs 1 Lakh To Rs 3 Lakh In 11 Months, Giving 190% Returns; BUY?

All Adani Group-backed shares emerged as biggest winners amidst volatile market since the onset of 2024. However, there was one particular stock that has made remarkable growth despite the scandalous allegations imposed by US-based Hindenburg's report. In fact, this one stock has denied the forces of bears that the short seller's research report casted like dark clouds on majority of Adani shares. This stock is none other than Adani Ports who has emerged a multibagger since 2023. On Wednesday, the stock touched a new 52-week high of Rs 1,144 apiece, rising by nearly 190% from its 1-year lows.

Notably, Adani Ports share price have turned Rs 1 lakh invesment value into nearly Rs 3 lakh corpus in a span of just 11 months. The stock's outlook is optimistic going ahead.

On Wednesday, at the time of writing, Adani Ports share price traded at Rs 1,101.50 apiece, up by 2.13%. But the stock touhed a new 52-week high of Rs 1,144 apiece in the first half of the trading session. Its markt cap is nearly Rs 2.38 lakh crore.

Adani Ports share price has been rallying for the past consecutive day now. Since December 28th, Adani Ports share gained more than 12% till date. In a year, the stock has gained by nearly 34% on BSE. However, the stock has skyrocketed by nearly 190% from its 52-week low of Rs 394.95 apiece which was recorded on February 3, 2023, due to sharp selling and billions of dollars worth market rout in Adani stocks after Hindenburg saga escalated.

So let's say an investor bought Rs 1 lakh worth shares of Adani Ports on February 3, 2023, their investment value have risen to nearly Rs 2.90 lakh as of nows, earning 190% returns on their capital.

Adani Ports is among the top five most valued stock of Gautam Adani's multibillion dollars conglomerate.

The latest bullish tone in Adani stocks is due to its strong volumes growth, coupled with board meeting that is scheduled on January 3rd, and the final verdict of Supreme Court.

In favour of Adani Group, the apex court has refused to order a probe by Special Investigation Team (SIT) into allegations of brazen stocks manipulation and other frauds claimed by US short seller Hindenburg in its first report dated January 24, 2023. Also, the three-bench judge on Wednesday endorsed the investigation carried by Sebi on Adani Group of companies and investors. The court ruled that there were no valid grounds or doubts in the investigation by Sebi which will require amendments on FPI and LODR regulations.

Apart from this, Adani Ports have announced that its board of directors will be meeting on January 3rd for consideration and approval of a proposal to issue Non-Convertible Debentures by way of public offering, preferential allotment and/or combination thereof as may be considered appropriate, or any other eligible securities, subject to all such regulatory/statutory approvals as may be required. The details will follow later in the day.

Nevertheless, Adani Ports operational performance has continued to be robust.

In December 2023, Adani Ports handled 35.65 MMT of cargo volumes, resulting in a strong 42% year-on-year (YoY) increase. Dry bulk cargo handling was up 63% while handling of containers increased by over 28% on a YoY basis.

Meanwhile, for the quarter that ended on December 31, 2023 (Q3FY24), the ports giant handled around 109 MMT of overall cargo, with around 106 MMT contributed by its domestic ports portfolio. Further, in the nine months of FY24, the company managed
around 311 MMT of total cargo, which is a healthy 23% YoY growth.

Karan Adani, CEO and Whole Time Director,
APSEZ on January 2nd said, ""APSEZ crossed the 300 MMT cargo mark in just 266 days versus its previous best of 329 days in the previous financial year. This milestone only proves that our strategy of driving operational efficiencies to achieve industry leading growth is yielding the desired results."

The CEO also said that Adani Ports is now targeting over 400 MMT of cargo volumes in FY24, surpassing the upper end of the guidance range (370-390 MMT) provided at the start of the current financial year.

From April to December 2023, many APSEZ ports recorded new milestones. Mundra,
the flagship port, handled around 5.5 million TEUs in a record nine months and is on track to surpass 7 million TEUs of container cargo volumes during FY24. It handled 3,000 ships in just 261 days, surpassing its previous record of 288 days in FY23. The JV terminal at Mundra Port, AICTPL, created a national record by handling 3,00,431 TEUs (around 10,000 TEUs every day) in November 2023, breaking its own record of 2,98,634 TEUs in March 2021. In October 2023, the port handled 16 MMT of cargo volumes and established a new milestone of achieving the highest cargo volumes by any Indian port in a single month.

Also, other milestones recorded by Mundra Port during the period under consideration
include the highest-ever parcel size of fertilizer vessel (100,282 MT), the largest
count of over-dimensional container/s in a single vessel (219 TEUs), the largest shipment of soyabean oil (61,841 MT) and the berthing of the largest-ever vessel that
has called on any Indian port (around 399 meters long and 54 meters wide).

Adani Ports said that these achievements were supported by ongoing improvements in Mundra Port's infrastructure. It added two RMGC cranes, which are helping in expediting train turnaround times and enhancing the port's ability to handle a greater count of rakes daily. Incidentally, the port has also started receiving double stack services from ICD Dadri through the Western Dedicated Freight Corridor (WDFC).

As per Trendlyne, the consensus recommendation from 19 analysts for Adani Ports is BUY. Of the total, 13 analysts have suggested strong BUY, while five of them called for BUY, and 1 analyst gave HOLD call on the stock. Among these analysts none suggested for selling. EPS is expected to grow by 27.2% in FY24.

In Q2FY24, promoters have increased holdings from 62.89% to 65.53%. Also, mutual funds have increased holdings from 2.68% to 3.56% by end of Q2FY24. Return on Equity(ROE) for the last financial year was 11.69%, in the normal range of 10% to 20%. Also, Interest Coverage Ratio is 5.29, higher than 1.5, which means that it is able to meet its interest payments comfortably with its earnings (EBIT).

On valuation, Motilal Oswal recently in its research report said, "We anticipate sustained volume growth due to enhanced utilization of current ports and favorable global trade trends. The company's: a) strong market leadership in ports, b) focus on value-added areas such as logistics, and c) focus on strategic acquisitions position it favorably for the future."

Further, Motilal's note added, "The operational ramp-up at recently acquired ports is expected to drive a 16% growth in cargo volumes over FY23-25. This would drive a revenue/ EBITDA/PAT CAGR of 23%/21%/17% over FY23-25. We reiterate our BUY rating with a revised TP of INR1,210 (premised on 16x FY25E EV/EBITDA)."

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