Adani Ports Share Hits Record High, Up Over 194% in a Year – Kotak Predicts More Upside

Manoj Prasad

Adani Ports share have risen more than 194% from their 52-week lows and hit a new record high of Rs 1,160 (as of January 8, 2024), commanding a total market capitalization of close to Rs 2.51 lakh crore. The stock is among the preferred picks of Kotak Institutional Equities, which sees more upside in the stock in the coming days.

Adani Ports is India’s largest ports and logistics service provider. The company is reported to raise Rs 500 crore via issuance of non-convertible debentures, which may open on January 8. One of the bond issuances will have a term of five years and a fixed coupon of 8.7%, while the other bond issuance will have a term of ten years.

The recent surge in Adani Ports share prices, reaching new highs and a market capitalization of close to Rs 2.51 lakh crore, can be attributed to several factors:

  1. Improved reach, operational efficiencies, and strategic port locations have contributed to the company’s growth, with volumes soaring to more than four times the levels recorded in FY11.
  2. Adani Ports has a comprehensive range of integrated service offerings, which has helped it maintain a strong market position.
  3. The company is expected to strengthen its market dominance, achieving a 12% volume CAGR over FY23–25.
  4. Adani Ports has a potential 28% upside, according to Motilal Oswal Securities, due to its market leadership in the ports segment, focus on value-added areas such as logistics, and strategic acquisitions.
  5. The stock has experienced a 194% surge from its 52-week lows, following Hindenburg’s report and the company’s strong financial performance.
  6. Adani Ports is among the preferred picks of Kotak Institutional Equities, which sees more upside in the stock in the coming days.
  7. The company is expected to grow earnings and revenue by 24.3% and 13.3% per annum, respectively, with EPS growth rate of 24.2%.

In the past year, the performance of Adani Group’s companies has been mixed. Some of the key factors that have influenced their performance include:

  1. Impact of the Hindenburg Report: In late January 2023, US-based short seller Hindenburg Research accused the Adani Group of accounting fraud, stock price manipulation, and improper use of tax havens. This led to a significant stock market downturn for the Adani group shares, wiping out close to $150 billion in market value at its lowest point.
  2. Revenue Growth: Adani Enterprises outperformed its 3-year Revenue CAGR, with an annual growth of 96.18%, showcasing strong business performance.
  3. Stock Price Manipulation: The high valuations of Adani Group stocks were due to a variety of manipulations, including acquisition of assets at cheap prices, leveraging over-valued assets to raise large loans to acquire more assets, and rounding up the valuations.
  4. Energy Transition Initiatives: Adani Group announced plans to invest $75 billion on energy transition initiatives by 2030, which could boost the group’s vision to have 45 gigawatt of renewable energy capacity by the same year.
  5. Market Volatility: Adani Enterprises shares experienced significant intraday volatility, trading within a 10% range in a single day. The stock reclaimed Rs 3,000 levels as the session progressed, and the 9.4% gain on Wednesday, January 3, 2024, took the share price to Rs 3,199.45, commanding a total market capitalization of Rs 3.65 lakh crore.
  6. Key Support and Resistance Levels: The Rs 2,750 mark stands as a critical support level for Adani Enterprises, and a potential breakout above the Rs 3,100 range suggests a continuation of the uptrend. A breakdown below Rs 2,750 should be closely monitored by swing traders.

Overall, the performance of Adani Group’s companies in the past year has been influenced by factors such as the impact of the Hindenburg Report, revenue growth, stock price manipulation, energy transition initiatives, market volatility, and key support and resistance levels.

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