The stock fell as much as 12.78% in intraday trade, before closing down 12% at Rs207.65, its sharpest decline since 10 October 2008
Mumbai: Shares of Adani Ports and Special Economic Zones Ltd closed 12% lower on Wednesday, their steepest fall in seven and a half years, after the company’s earnings released a day earlier showed lower-than-expected cargo growth and a jump in loans and advances.
During the day, the stock fell as much as 12.78% to ₹ 205.75 on the BSE, its worst fall since 26 November 2010. The stock closed at ₹ 207.65, down 12%, its sharpest decline since 10 October 2008. So far this year, the Adani Ports stock is down 20%. India’s benchmark Sensex index fell 0.51% to close at 25,101.73 points.
On Tuesday, the company reported a 38% increase in its net profit to ₹ 914 crore as compared with ₹ 661 crore a year ago. Total income increased by 18% to ₹ 2,162 crore in the fourth quarter as compared with ₹ 1,832 crore in the year-ago period.
“Total cargo handled grew by a muted 2% year-on-year (y-o-y) to 37 million tonnes. Mundra port reported a decline of 3% year-on-year in cargo volumes. Total cargo volumes for FY16 stood at 151.5 million tonnes, dragged down by coal volumes (-8% y-o-y), but partly mitigated by crude (+12% y-o-y) and container cargo volumes (+17% y-o-y)," said domestic brokerage firm Phillip Capital in its earnings report.
“Gross debt stood at ₹ 2,250 crore at 1.7x D/E (debt-to-equity). Loans and advances grew by ₹ 3,800 crore on account of loan to solar park ( ₹ 350 crore), investments," it added.
Brokerage firm Kotak Institutional Equities expressed concern over the company’s higher loans and advances. “Loans and advances have increased sharply in FY2016 and we remain cautious on this development. We reduce our rating by one notch to ADD with a revised target price of ₹ 255," it said.
Other Adani Group companies too closed lower. Adani Enterprises Ltd fell 7.7% to ₹ 79.25 after it reported weaker-than-expected earnings. The company posted a net profit of ₹ 167 crore against Bloomberg analyst estimates of ₹ 299 crore.
Adani Power Ltd fell 4% to ₹ 30.45, while Adani Transmission Ltd fell 3.24% to close at ₹ 31.40.
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