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Adani Ports hits 52-week high on bullish brokerage calls

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Adani Ports & Special Economic Zone share price rallied over 4 percent to hit a fresh 52-week high of Rs 474.90 apiece on Monday.

Adani Ports hits 52-week high on bullish brokerage calls
Adani Ports & Special Economic Zone share price rallied over 4 percent to hit a fresh 52-week high of Rs 474.90 apiece on Monday. The stock gained after brokerages raised the target price as the operational turnaround of Krishnapatnam Port was faster than expected. The infra stock has rallied more than 38 percent in the last 6 months.
At 12:10 pm, Adani Ports & SEZ shares traded 2.79 percent higher at Rs 466.35 per share on the BSE as compared to a 0.49 percent gain in the benchmark Sensex.
Here's what brokerages have to say on the Adani Ports & Special Economic Zone:
CLSA
“Adani Ports & SEZ validated our recovery thesis with double-digit growth in its port traffic for a fourth month running in Nov 2020. In 2021, we expect strong double-digit traffic growth led by container, coal and new gas facilities (LNG/LPG), gaining share, the start of new ports in Myanmar & Vizinjham and the acquisition of Dighi Port to be catalysts,” CLSA said.
The brokerage raised its EPS 12 percent over FY22-23CL and raised its target price to Rs 540 from Rs 425 to factor-in a rebound in volume, higher margins and a lower cost of equity on the return of growth to its port business. It maintained a Buy rating on the stock.
Jefferies
Jefferies has maintained a 'buy' rating on the stock and raised the target price to Rs 525 from Rs 475 per share earlier. Jefferies revised its FY21e-23e estimates by 3-7% to factor in the November 2020 volume data.
“Adani Ports showcased the management focus to improve Krishnapatnam Port’s (KPTL) margins from the current 68 percent to 80 percent by FY25E. KPCL is a value-accretive acquisition with 26 percent equity IRR even on our conservative 73 percent FY25E margin estimate,” Jefferies said.
The brokerage house believes that continuing operational improvement and reduction in promoter pledges could drive further rerating from current levels.
Nomura
Nomura maintained a Buy call and raised the target price to Rs 530 per share. The research house also raised EBIDTA estimates by 3-4 percent over FY21-23 on strong operation turnaround.
Krishnapatnam Port’s (KPCL)’s turnaround was faster than our expectations, said Nomura. The overall volume outlook strong with momentum continuing into 3QFY21, while the KPCL acquisition was significantly value-accretive, it added.

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