The crisis hit Adani Group company has seen some strong recovery this past month. Adani Ports‘ share price has gone up over 8% in the past month. Analysts at ICICI Direct see the stock going further up as it remains positive on the company’s long-term growth prospects.

The Adani Ports Analyst: The Bharat Chhoda-led analyst team at ICICI Direct maintained the ‘buy’ rating for the stock with a price target of ₹900 – an over 22% upside from the stock’s last closing price of ₹732.05.

The Adani Ports Thesis: The analysts noted that the company’s March quarter revenue beat its estimates. The brokerage firm highlighted that revenues grew 40% year-on-year to ₹5,797 crore, supported by Haifa consolidation. The analysts also stated that the tepid 5% growth in net profits to ₹1,159 crore was due to an exceptional loss of ₹1,273 crore.

See Also: Auditor Flags Adani Ports Transactions, Hindenburg Report Back In Focus

In its latest research note, the brokerage said that APSEZ intends to prioritise a healthier balance sheet over growth (although the company has maintained its guidance of reaching 500 MMT by FY25). The firm added that with a lower capex, the port company’s free cash flow has improved to 5-6% levels, which provides comfort on future expansion and debt levels.

The firm also highlighted that the company has won five bids (two in the ports business and three in logistics) during the year ended March for the mechanisation of Berth 2 at Haldia Port and Greenfield
construction of Tajpur Port and also, for Loni ICD, Valvada ICD and 70 agri silos with a cumulative capacity of 2.8 MMT.

The domestic brokerage firm also increased its estimates for the company’s profits in FY24 and FY25 by 7.1% and 11.6%.

Price Action: Adani Ports’ share price was up 1.05% to trade at ₹739.70 in the early hours of trading on Friday.

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