What should investors do with Adani Ports after June quarter results: buy, sell or hold?
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Adani Ports share price opened in the green on August 4, a day after the country’s largest integrated logistics player reported a 77.04 percent rise in consolidated net profit at Rs 1,341.69 crore for the first quarter of the current fiscal.
Adani Ports and Special Economic Zone Limited had clocked a consolidated net profit of Rs 757.83 crore in the corresponding period of the previous fiscal, according to a regulatory filing.
The company’s total income rose to Rs 4,938.43 crore in the latest June quarter from Rs 2,749.46 crore in the year-ago period.
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The company’s total expenses during the quarter under review increased to Rs 3,464.88 crore from Rs 1,805.24 crore in the same period a year ago.
The stock was trading at Rs 715.50, up Rs 10.30, or 1.46 percent. It has touched an intraday high of Rs 719.00 and an intraday low of Rs 714.
Here is what brokerages have to say about the stock and the company after Q1 earnings:
Goldman Sachs | Rating: Buy | Target: Rs 790
The Q1 operationally is in line after adjusting for one-time SEZ revenue and MTM FX loss. The company raised volume guidance but it there was only a slight increase in revenue guidance. Diversification of cargo stream, LPG & LNG terminal additions and new ports will be key growth drivers.
CLSA | Rating: Upgrade to outperform | Target: Rs 816
Traffic picked up from a low base in Q1. Share gains continued in Q1—310 bps in overall cargo and 163 bps for containers. Port EBITDA margin rose 100 bps to 71 percent on price hikes and cost-cutting. Earnings supported by lumpy port development income that added 6 percent to EBITDA.
Citi | Rating: Buy | Target: Rs 1,000
The company raised FY22 underlying volume growth guidance by 10 mmt, which we think is conservative. The market share in the port business can take another leg-up via Gopalpur and Karaikal acquisitions. Dominance in the port sector continues to increase and it remains our top pick.
Nomura | Rating: Buy | Target raised to Rs 915
Strong results and management’s clarification on key issues are the key highlights. Increase FY22/23 EBITDA estimates by 5%/1%. Management highlighted potential for further acquisitions like Karaikal and Gopalpur ports. Management highlighted potential acquisitions of CONCOR.
Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.
Adani Ports & SEZ to see big jump in market share: Why it is stock pick of the week
Operations of Adani Ports and SEZ, India’s largest private port and special economic zone, are moving from strength to strength. This was demonstrated once again during the first quarter of 2021-22. For instance, its first quarter cargo volume grew by 83% y-o-y compared to 33% aggregate growth by all Indian ports and helped it to corner further market share. While its cargo market share increased by 310 basis points to 28.6%, its container
Promoter pledged shareholding continues to fall; Adani Ports, Sun Pharma promoters trim pledges
Promoters of listed companies continued to cut pledged shareholdings in the first quarter of the current financial year. (Image: REUTERS)
Promoters of listed companies continued to cut pledged shareholdings in the first quarter of the current financial year. Data sourced by domestic brokerage and research firm Kotak Securities showed that the value of pledged promoter holdings as a percentage of the value of total promoter holdings fell to 1.61% in the April-June quarter from 1.64% in the January-March quarter. The April-June quarter was the second consecutive quarter with no BSE 500 company having more than 90% of its promoter holdings pledged.
At the end of June this year, promoters of only 78 of all the BSE 500 companies had pledged part of their holdings. “The value of pledged promoter holdings was Rs 1.7 lakh crore at end-June 2021, which is about 0.81% of the total BSE-500 Index’s market capitalization,” Kotak Securities said. High promoter pledging is not an indication of financial stress for a company. Banks often seek additional security in the form of promoter shares.
Pledged shareholding reduces
– At the end of June 2021, no BSE 500 company had more than 90% of their promoter shareholdings pledged.
– Companies in which pledged promoter holdings fell: Crompton Greaves Consumers, Max Financial Services, Dish TV, Edelweiss Financial Services and Gateway Distriparks, among others.
– Promoters of 78 companies in the BSE-500 Index pledged part of their holdings in the April-June quarter.
– Nifty-50 companies where promoter pledged holdings fell: Adani Ports & SEZ, Asian Paints, JSW Steel and Sun Pharmaceuticals.
Nifty 50 companies with over 5% pledged promoter holdings
-IndusInd Bank – 45.5% pledged, up from 36% in Jan-Mar quarter
-JSW Steel – 14.8% pledged, down from 17.7% in Jan-Mar quarter
-Adani Ports & SEZ – 14.4% pledged, down from 16% in Jan-Mar quarter
-Asian Paints – 9% pledged, down from 9.4% in Jan-Mar quarter
-Sun Pharmaceuticals – 6.4% pledged, down from 8.6% in Jan-Mar quarter
The value of IndusInd Bank’s pledged shareholding stands at Rs 5,400 crore, while that of JSW Steel is at Rs 10,700 crore, and for Adani Ports is Rs 13,200 crore.
Companies with the highest promoter pledges as a percentage of their holding
-Suzlon Energy – 88.5% promoter holding pledged
-Future Consumer – 88.4% promoter holding pledged
-GMR Infrastructure – 74.9% promoter holding pledged
-Max Financial Services – 62.2% promoter holding pledged
–Sterling Wilson – 54.7% promoter holding pledged
Highest value of pledges
*Hindustan Zinc – Rs 21,200 crore
*Asian Paints – Rs 13,700 crore
*Adani Ports & SEZ – 13,200 crore
*JSW Steel – Rs 10,700 crore
Companies that increased pledges significantly
– Johnson Controls made fresh pledges in the quarter, totalling 32.3% of the entire promoter holdings.
– Wockhardt increased pledged shareholding to 34.4%, up from 18.7%.
– IndusInd Bank increased pledged shareholding to 45.5% from 36%.
– S H Kelkar and Company increased pledged shareholding to 6%.
– GMR Infrastructure pledged shareholding increased to 74.9% from 72.8%.
– Apollo Hospitals Enterprise pledged shareholding increased to 30% from 27.9%.