Analysts retained their bullish investment recommendations on Adani Ports & Special Economic Zone Ltd. even as the nation’s largest port operator missed estimates in the fourth quarter.
“4QFY21 Ebitda is 17% below expectations, given lower margins but should recover as volumes rise,” Jefferies India said in a post-earnings note on Wednesday. Antique Stock Broking agreed.
Billionaire Gautam Adani’s ports and SEZ empire on Tuesday reported a fourfold jump in profit over the year earlier at Rs 1,287 crore, and 39% increase in operating income at Rs 2,287 crore. But they missed the consensus forecasts of analysts tracked by Bloomberg.
According to Jefferies, Adani Ports’ stock can be rerated from current levels if:
Market share rises from 21% to 32% with recent acquisitions by FY25E;
Return on equity is back at 20% with asset-sweating.
Further drop in promoter pledges.
Shares of Adani Ports dropped as much as 4.69%—the worst since April 19, 2021—around 2 p.m. on Wednesday. Of the 26 analysts tracking the company, 21 have a ‘buy’ rating, two recommend a ‘hold’ and three suggest a ‘sell’, according to Bloomberg data. The average of 12-month consensus return potential implies an upside of 11.4%.