Why Adani Ports Share Price is Rising

Indian share markets got a great head-start this Monday with a massive surge. Sensex, witnessed a remarkable gain of over 2,500 points by the closing bell.

This rally was attributed to positive exit polls predicting a landslide victory for the ruling NDA party.

The Adani group emerged as a major winner in this market rally, with all Adani group stocks experiencing significant gains.

Among these, Adani Ports share price is on a particularly noteworthy tear, witnessing a steady climb in its share price over recent weeks. But what's propelling this specific surge for Adani Ports?

Let's dissect the potential factors of the rally.

#1 Exit Poll Results

Local exit surveys conducted over the weekend indicated that Prime Minister Narendra Modi and his Bharatiya Janata Party (BJP)-led coalition were likely to secure a third consecutive term in office, a relatively uncommon occurrence.

Several surveys suggested that the BJP-led National Democratic Alliance (NDA) could win between 350 and 370 seats in the lower house of India's parliament.

The optimistic forecast for Adani Ports stems from expectations of continued policy consistency and ongoing investments in infrastructure under a potential third term for Prime Minister Narendra Modi.

#2 Subsidiary Entered into a Concession Agreement

Adani Ports, through its subsidiary Adani International Ports Holdings, signed a 30-year agreement to manage Container Terminal 2 (CT2) at Tanzania's Dar es Salaam Port. This strategic port boasts excellent road and rail connections.

To operate CT2, Adani Ports acquired a controlling stake in Tanzania International Container Terminal Services (TICTS) for US$ 39.5 million (m). TICTS already owns the necessary equipment and employs the workforce for CT2 operations.

CT2 is a crucial terminal, handling a significant portion (83%) of Tanzania's container traffic with a capacity of 1 million TEUs annually.

This acquisition aligns with Adani Ports' ambition to become a global leader in port operations by 2030. The company will consolidate TICTS financially.

#3 Strong Growth Plans

The Adani group, a diversified conglomerate with port operations as a core business through Adani Ports, is embarking on a massive expansion spree.

Reportedly, the group is planning to invest a staggering US $90 billion (bn) over the next decade, positioning Adani Ports to be a significant beneficiary.

It also recently unveiled its ambitious five-year plan, targeting an 18% annual growth in earnings before interest, tax, depreciation, and amortisation (EBITDA) from FY24 to FY29.

This growth is expected to be fuelled by port expansion and efficiency improvements, with the company aiming to handle a massive 1 bn tons of cargo by 2030.

For FY25 specifically, the company projects cargo volumes to reach 460-480 m metric tons, translating to revenue between Rs 290-310 bn.

In FY25 EBITDA is estimated to be in the range of Rs 170-180 bn. The company aims to maintain a healthy financial position with a net debt to EBITDA ratio between 2.2x and 2.5x, while planning a capex of Rs 105-11,500 bn in FY25.

How Adani Ports Share Price has Performed Recently

In the past five days, Adani Ports share price has rallied 11.6%. In the last month, it is up 23.3%.

In 2024, so far it surged more than 51.7% and it is up by 115.2% in the past year.

The stock touched its 52-week high of Rs 1,607.9 on 3 June 2024 and a 52-week low of Rs 702.9 on 23 June 2023.

About Adani Ports

Adani Ports and Special Economic Zone (APSEZ) is the largest commercial ports operator in India accounting for nearly one-fourth of the cargo movement in the country.

Its presence across 13 domestic ports in seven maritime states of Gujarat, Maharashtra, Goa, Kerala, Andhra Pradesh, Tamil Nadu, and Odisha is the most widespread national footprint with deepened hinterland connectivity.

Through its subsidiary Adani Logistics, APSEZ operates three logistics parks located at Patli in Haryana, Kila-Raipur in Punjab, and Kishangarh in Rajasthan.

The company's segments include Port and special economic zone (SEZ) activities, and Others. The Port and SEZ activities segment is engaged in developing, operating and maintaining the ports services, ports related infrastructure development activities and development of infrastructure at contiguous special economic zone.

The others segment represents mainly logistics, transportation and utility business. Its ports to logistics platform comprises port facilities and integrated logistics capabilities, including multimodal logistics parks, grade A warehouses, and industrial economic zones.

For more details about the company, you can have a look at Adani Ports factsheet and quarterly results on our website.

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