Home / Market / Stock-market-news /  Adani Ports gains 7.93% after strong Q1 results; market cap up by Rs3,935.46 crore

Mumbai: Shares of port operating company Adani Ports and Special Economic Zone Ltd on Wednesday gained as much as 9%, its maximum gain in one year, after the company reported better-than-expected earnings.

The stock hit a high of 260.95 a share, a level last seen on 4 January, and gained as much as 9%, the maximum gain since 14 August 2015. So far this year, it fell 0.8%. The stock closed at 258.55 apiece, up 7.93%, while the benchmark Sensex fell 1.1% to 27,774.88 points.

Market capitalization of Adani Ports rose by 3,935.46 crore to 53,544.46 crore.

India’s largest port developer said its net profit rose 30.8% to 835.71 crore from 638.93 crore a year earlier. Net sales rose 6.3% to 1,817.23 crore from 1,708.88 crore a year ago. Total cargo handled grew by 7% to 42.33 million tonnes in the first quarter on a consolidated basis from 39.61 million tonnes in the year-ago quarter. Mundra Port reported a strong quarter-on-quarter growth (+11.5%) in cargo volumes, although they were still down -3.5% year-on-year (y-o-y).

In its conference call, the management attributed robust cargo growth in the quarter to jump in company coastal shipping volumes and ramp up in coal volumes at Mundra. It guided to cargo volume growth of 10-15% in FY17—driven by container cargo at new ports of Katupalli, Ennore and CT4 (Mundra). Dhamra is expected to report 50% y-o-y growth in volumes, on higher coastal shipping volumes.

“Net profit was up, ahead of consensus, on better traffic, repricing of debt and treasury income. Container and crude led volumes, while coal declined. A strong volume rise at Dhamra, Hazira and CT3 (third container terminal) validates our thesis of new ports being the driver of the company’s growth," CLSA said in a note to its investors.

The management also stated its intention to reduce the loans and advances, especially to related parties, significantly by September, and entirely by March 2017.

“We believe that the promoters’ assurance to unwind the group loans six months ahead of schedule and turn in traffic are potent catalysts for a re-rating," the CLSA report added.

CLSA has rated the stock to “buy" with a target price of 305 a share, PhillipCapital has maintain the stock to “buy" and increased its target price by 11% to 265 a share, Credit Suisse has increased its target price to 280 share from 270 a share, while Goldman Sachs has increased its target price to 266 a share.

Of the analysts covering the stock, 19 have a “buy" rating and five have a “hold" rating, shows Bloomberg data.

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