We maintain ‘outperformer’ on Adani Ports & SEZ (APSEZ) with a March 2016-based revised price target of R342...
We maintain ‘outperformer’ on Adani Ports & SEZ (APSEZ) with a March 2016-based revised price target of R342 from R313 earlier, the price revision reflecting increased visibility on SEZ land monetisation. We like APSEZ for its strong asset base, visibility on cargo and sustained cash flows.
With the Mundra SEZ now receiving its final environment clearance, we expect a pick-up in its development. With a land bank of 16,000 acres, this SEZ is likely to be a key value driver going forward. We expect 28% earnings CAGR over FY14-17e.
APSEZ adjusted consolidated PAT grew 6.3% y-o-y to R590 crore, led by land related income of R200 crore. Reported PAT after considering derivative loss of R16 crore grew 68% y-o-y to R570 crore.
Consolidated cargo volumes grew 25% y-o-y to 35.2 million tonnes led by strong growth in coal and container cargo even as crude volumes remained weak due to maintenance shutdown at HMEL’s Bhatinda refinery. Cargo at Mundra grew 8% y-o-y to 26.6 million tonnes, at Dahej by 31% y-o-y to 3.3 million tonnes and Hazira by 48% y-o-y to 1.45 million tonnes. Dhamra was consolidated for the first full quarter with cargo of 3.6 million tonnes.
Consolidated revenues grew 44% y-o-y to R1650 crore and ebitda grew 39% y-o-y to R1050 crore. Ebitda margin declined 230 bps y-o-y to 63.5%. Consolidated net debt increased to R16,500 crore from R12,500 crore as on March 2014 due to acquisition of Dhamra and restatement of forex loans.