Adani Ports gains 5%, hits new high on completing Dighi Port acquisition

Shares of Adani Ports and Special Economic Zone (APSEZ) hit a new high of Rs 670, up 5 per cent, on the BSE in intra-day trade on Wednesday after the company said it has completed the acquisition of 100 per cent stake of Dighi Port Limited (DPL) for Rs 705 crore on February 15, 2021.

APSEZ plans to invest over Rs 10,000 crore to develop the port into a multi-cargo port and investing in the development of rail and road evacuation infrastructure for seamless and efficient cargo movement. The company will strengthen and repair existing infrastructure and invest in the development of facilities for the dry, container, and liquid cargo.

“With the acquisition of DPL, APSEZ marks its presence in Maharashtra, the largest Indian state in terms of its contribution to the GDP and will support the industrial zones in the Mumbai and Pune region; DPL will be at the forefront to develop and support port-led industrial development,” APSEZ said in a press release.

Meanwhile, analysts at Edelweiss Securities believes APSEZ’s volume momentum will sustain driven by external factors like global and local trade momentum; and importantly, internal factors like market share gains, cargo diversification, improved hinterland, cargo stickiness, among others. Regular price hikes further enhance earnings prospects.

“APSEZ’s volume growth has seen a better-than-expected uptick, and we believe the volume rebound is less attributable to pent-up demand and is sustainable. With global trade momentum on the rise in the wake of economic recovery, APSEZ’s scale, leadership and extended gate operations should enable it to exploit the opportunity,” the brokerage firm said in a recent report.

In the past three months, the stock has outperformed the market by surging 75 per cent, as compared to an 18 per cent risen in the S&P BSE Sensex.