Brokerages retained their bullish view on Adani Ports and Special Economic Zone (APSEZ) after the company on Tuesday posted a 31.57 per cent growth in its consolidated profit to Rs 1,393.69 crore for the second quarter ended on September 30. It had reported a profit of Rs 1,059.20 crore for the corresponding quarter last year.

Global brokerages Jefferies and CLSA are bullish on Adani NSE -1.07 % Ports with a price target of Rs 425 and Rs 475. This indicates an upside of up to 29 per cen ..

Kotak Institutional Equities revised the fair value of stock upward to Rs 435 (Rs 425 earlier). “Adani Ports reported a good quarter on volume growth, EBITDA margin, cash flows and new contracts. It would likely enter a period of improving returns from FY2022,” Kotak said.

Total consolidated income of the company also increased to Rs 3,423.16 crore for the second quarter as against Rs 3,326.90 crore in the year-ago period. On the other hand, the company’s total expenses during the quarter under review declined to Rs 1,622.78 crore compared to Rs 2,440.56 crore in the year-ago period.

Karan Adani, Chief Executive Officer and Whole Time Director of APSEZ said, “With economy reopening in stages, APSEZ has returned to growth trajectory registering a cargo volume growth of 36 per cent on a QoQ basis. Port EBIDTA improves to 71 per cent on account of continuous focus on operational efficiency."

"Our focus continues to be on preserving cash and ensuring adequate liquidity. We continue to increase our free cash generation, in H1 FY21 cash flow from operations after adju sting for working capital changes, capex and net interest cost stands at Rs 2,884 crore."

Adani said APSEZ is well on course to achieve 500 million tonne (MT) of cargo throughput by FY2025 and added: "our focus remains on improving the free cash generation and ROCE of all our ports to be in excess of 16 percent."

Adani further added that the company’s businesses and future investments are aligned to sustainable growth with a focus on preserving the environment and added that APSEZ is committed to reduce carbon emission and become carbon neutral by 2025.

CLSA added that debt and indebtedness of the company rose but there is nothing to worry and the guidance is backed with improved visibility.


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