Adani Ports & Special Economic Zone Ltd. share price target

ICICI Securities Ltd | Retail Equity Research We visited Mundra port of Adani Ports & SEZ (APSEZ) to get an insight into the port operations. We also had an opportunity to interact with the management and get an update on the business outlook and its future plans. Mundra Port, India's largest private port, is slated to cross 115 million tonnes (MT) of volume by FY18E (up 10 times) from 10 Mt in FY08 driven by increasing container and crude volumes. Subsequently, revenues from Mundra grew 10x in 10 years establishing itself as one of...

Adani Ports & Special Economic Zone Ltd Q3FY18 results comment Revenue fell by 0.64% to Rs. 2688.85 Cr in Q3FY18 when compared to the previous quarter

Adani Ports and Special Economic Zone Limited (APSEZ), India's largest port developer and the logistics arm of Adani Group, announced second quarter ended 30th September, 2017 and profit beats estimates. Adani Port and Special Economic Zone has registered 25% growth in consolidated sales for the quarter ended September 2017 to Rs 2706.11 crore. But its PAT was down by 7% to Rs 997.04 crore. Fall at PAT despite higher sales is largely due to 490 bps contraction in operating profit margin to 66% that has restricted the operating profit growth at 16% to Rs 1784.77 crore and higher tax incidence. But for higher other income, lower interest and depreciation cost as...

Revenue rose by 1.03% to Rs. 2231.46 Cr in Q4FY17 when compared to the previous quarter.

We attended the earnings meet of Adani Ports & SEZ (APSEZ) and got an opportunity to interact with the top management and get an insight into its business and future plans. APSEZ is one of India's biggest private sector port infrastructure company. Over the past two decades, APSEZ has built, acquired and developed an unparalleled portfolio of ports infrastructure and services across India. The ports business includes 10 strategically located ports and terminals around the Indian coastline, representing 24% of the country's port capacity. APSEZ also provides...

We roll forward our TP to FY19E and have a BUY rating with TP of Rs 396. Our SOTP based TP implies EV/EBITDA of 12.5x FY19E, which we believe is reasonable for a company with RoCE of 16% at just 55% utilization and EBITDA growth of ~15% pa.

Port EBITDA of ~Rs 12 bn (up 25% YoY) was driven by 8% YoY volume growth at 41 MT. Cargo at flagship Mundra port grew ~7% YoY (driven by containers). Profitability surprised positively rising 15% YoY to Rs 300/t. Results were boosted by SEZ income of Rs 2 bn.

Revenue rose by 2.34% to Rs. 2226.62 Cr in Q3FY17 when compared to the previous quarter. Also, it increased by 31.62% when compared with Q3FY16

Adani Ports & SEZ (APSEZ) began commercial operations in October 2001, post entering into concession agreement with GMB to build, operate and maintain the port for a period of 30 years till 2031 extendable by another 20 years. The port is into providing cargo handling services for bulk, crude and container cargo. The company has also received approval to develop the adjacent port land as a multiproduct SEZ. The company is the first port in India to handle one million TEU...