Adani Ports gains 3% post Q1 nos; Co to raise up to Rs 3,000 crore via NCDs

Shares of Adani Ports and Special Economic Zone (APSEZ) gained over 3 per cent on the BSE on Wednesday, a day after the company reported its June quarter numbers for the fiscal year 2020-21 (Q1FY21).

At 09:25 AM, the stock was trading over 2 per cent higher at Rs 342.30 on the BSE. It hit a high of Rs 346.35 in the early deals against Tuesday's close of Rs 334.85. APSEZ's shares had hit a 52-week high of Rs 428.95 on October 22, 2019 while its 52-week low level stands at Rs 203.40, hit on March 23, 2020.

For the April-June quarter, the company reported a 26 per cent year-on-year (YoY) decline in its consolidated net profit at Rs 758 crore. Revenue from operations stood at Rs 2,292.69 crore, down 18 per cent against Rs 2,794.47 crore in the corresponding quarter of the previous fiscal. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) shrunk 22 per cent to Rs 1,438 crore against Rs 1,843 crore recorded in the same period last year. EBITDA margin was at 63 per cent as of June 30, 2020, as against 66 per cent as of June 30, 2019. CLICK HERE TO READ FULL REPORT

Edelweiss Securities notes that Adani Ports sprung a positive surprise during the quarter under review with the stronger-than-expected realisations on the back of 2.5 per cent tariff hike and favourable cargo mix, leading to 70 per cent port margins. 

"After a dampening 27 per cent YoY dip in volume in Q1, July marked 6 per cent YoY growth, which suggests evacuation bottlenecks have ebbed. APSEZ is sharpening its focus on cargo/service lines/customer diversification (added one each in Q1); cost-optimisation through efficiencies; and conserving cash," the brokerage said in a result review report.  

Adding, "we continue to have a constructive view on APSEZ and believe that it is best placed to capitalise on growth (upon recovery) given its steady leadership, client rapport, and balance sheet heft."

It has retained a "BUY" rating on the stock with a sum-of-the-parts valuation (SoTP) based-target price of Rs 395.

In a separate filing, Adani Ports informed that its board has approved a proposal to raise up to Rs 3,000 crore through issuance of non-convertible debentures (NCDs). The fund will be raised in one or more tranches. The company said its board has also given its consent for exploring and evaluating the proposal to create a platform, which will hold rail infra assets and investments in rail entities.