Shares of Adani Ports and Special Economic Zone (APSEZ) rose 5 percent to hit a new high in intra-day deals on Wednesday after the company completed the acquisition of Dighi Port Limited (DPL) for Rs 705 crore.
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DPL is the 12th port to join APSEZ’s string of economic gateways across the eastern and western coast of India. This acquisition would establish the company’s footprint in Maharashtra, the largest contributor to India’s GDP, the company said in a press release.
“With the acquisition of DPL, APSEZ marks its presence in Maharashtra, the largest Indian state in terms of its contribution to the GDP and will support the industrial zones in the Mumbai and Pune region; DPL will be at the forefront to develop and support port-led industrial development,” Adani Ports said in the release.
The stock rose as much as 5.2 percent to its new high of Rs 670 per share on BSE. In the past three months, the stock has outperformed the market by surging 75 percent, as compared to an 18 percent risen in benchmark indcies.
It plans to invest over Rs 10,000 crore to develop the port into a multi-cargo port and investing in the development of rail and road evacuation infrastructure for seamless and efficient cargo movement.
Brokerage house Citi retained a buy rating on the stock post the acquisition with a target at Rs 715 per share. It believes consolidation is continuing in the industry and the valuation is attractive, especially given good quality underlying business.
For the December quarter, the company’s consolidated net profit in Q3FY21 rose 15.4 percent to Rs 1,561.47 crore from Rs 1,352.17 crore, while revenue increased 29 percent to Rs 3,746.49 crore from Rs 2,901.95 crore, YoY.
Post the earnings, Nomura downgraded the stock to Neutral saying a strong earnings outlook is likely factored in.
The volume outlook is robust into FY22 and COVID-19 linked impact for the company is now behind, it added.
Meanwhile, Goldman Sachs maintained a Buy call and raised the target price to Rs 620 per share on the company’s strong performance and expects stable trends in Q4. The brokerage sees the company’s dominance on the port sector to continue.