Adani Ports share gain over 2% as HSBC raises target on SC’s Hindenburg verdict
Adani Ports share price gained over 2% in early trade on Thursday after HSBC raised target price on the stock. Adani Ports shares rose as much as 2.32% to Rs 1,118.95 apiece on the BSE. In the one week period, Adani Ports share price has rallied more than 9%.
HSBC has raised its target price on Adani Ports and Special Economic Zone (APSEZ) to ₹1,250 per share from ₹920 earlier as it believes that the Supreme Court verdict should cement investor confidence. The brokerage has a Buy rating on the stock.
The Supreme Court of India on Wednesday disposed of petitions seeking a third-party investigation into allegations of accounting fraud and stock manipulation levelled by US short seller Hindenburg Research.
In a big relief to the embattled Adani Group, the apex court ruled that the fraud allegations against the apples-to-airport conglomerate do not need more probes either by a special investigation team (SIT) or CBI, as it gave capital market regulator SEBI three more months to conclude its over two-year-old investigation.
HSBC expects that the verdict should renew the company’s expansion and shift focus to its solid Ops performance and thinks the company may be more open to inorganic opportunities and gearing its balance sheet.
Analysts expect a 17% CAGR in the company’s EBITDA for FY2023-26E. ROIC is also expected to rise to 17% in FY26 from 13% in FY23, as per HSBC.
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Additionally, in a regulatory filing, Adani Ports and Special Economic Zone (APSEZ) said that its board of directors approved raising funds up to ₹5,000 crore via public issuance of non-convertible debentures of face value of ₹1,000 each amounting up to ₹5,000 crore through one or more tranches.
In another release, Adani Ports said it has elevated CEO Karan Adani to the role of Managing Director, a position which was held by Gautam Adani, Chairman of the Adani Group.
Gautam Adani is re-designated as ‘Executive Chairman’ of APSEZ.
Also Read: For Adani group, SC verdict brings curtains down on a turbulent year
The company’s board has also approved the appointment of Ashwani Gupta as its new Chief Executive Officer. Gupta was former global Chief Operating Officer at Nissan Motors.
Adani Ports & SEZ operates 14 ports and terminals in India.
In December 2023, the company handled 35.65 MMT of cargo volumes, resulting in a strong 42% year-on-year (YoY) increase. It is now targeting to handle over 400 MMT of cargo volumes in FY24, surpassing the upper end of the guidance range (370-390 MMT) provided at the start of the current financial year.
At 9:40 am, Adani Ports shares were trading 1.42% higher at ₹1,109.05 apiece on the BSE.
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Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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Published: 04 Jan 2024, 09:46 AM IST
