Shares of Adani Ports & Special Economic Zone (APSEZ) Ltd. will be in focus on Tuesday (April 2) as global brokerage firm Citi remains positive on the stock, in fact, they are opening a 90-day positive catalyst watch on the counter.
Citi has raised its target price on the Adani Ports stock from ₹1,564 per share to around ₹1,758 apiece, suggesting another potential upside of as much as 28% from Monday’s closing price.
Citi in its latest note said that Adani Ports is likely to report a strong quarter in its Q4FY24 earnings, with positive volumes, revenue, EBITDA growth and good cash flow.
The strong volume growth should lead to core-port EBITDA growth of about 29% year-on-year, while consolidated EBITDA and profit before tax is expected to grow 27% and 24% on-year.
The global brokerage added that valuations were still reasonable at 30 times P/E (price-earnings) and 19 times EV/EBITDA on FY25 estimates. Citi believes these valuations leave ample room for upside given quality and scale of underlying business.
Further, Citi highlighted that Adani Ports emerged stronger post a short-seller report last year with a strong business momentum, reduced leverage and increased market dominance.
Also, Morgan Stanley has maintained its ‘Overweight’ rating on the Adani Ports stock, with a target price of ₹1,576 per share. The foreign brokerage said the volume growth for the financial year gone by beat the guidance with eight on 10 ports reporting double-digit growth.
Adani Ports reported its highest-ever monthly cargo volume of 38 million metric tonnes (MMT) in March, it said in an exchange filing on Monday.
With this, the company has handled 420 MMT cargo globally in the financial year 2024, well above the 370-390 MMT it had guided for in January 2024. Adani Ports revised its financial year 2024 guidance in January to 370-390 MMT from 350-370 MMT earlier.
On Monday, shares of Adani Ports settled 2.69% higher at ₹1,378 apiece on the NSE. The stock has gained over 30% so far this year, while it is up 120% over the last 12 months.
