Q2FY18 result highlights
Key positives: Strong growth in container cargo and new cargo tie-ups.
Key negatives: Weakness in coal cargo volumes.
Impact on financials: Raised FY18E/FY19E earnings by 6.5%/6.7% to account for profit on CT-4 transfer and higher other income.
Valuations & view
Addition of new cargo streams and new volume guarantee contracts with clients like JSW Cement, Tata Steel & SAIL improves volume visibility for ADSEZ. Management’s commentary on raising dividends/shareholder distribution in future is an added positive. Maintain Outperformer with a revised FY19 based price target of Rs470 with revision led by improved visibility on water front/land monetization and improved volume visibility/guidance for Vizhinjam & Kattupalli.
Adani Ports and Special Economic Zone Limited is an India-based port infrastructure company. The Company is engaged in the business of developing, operating and maintaining the Port and Port-based related infrastructure facilities, including Multi product Special Economic Zone (SEZ). Its segments include Port and SEZ Activities, and Others. Its Others Segment mainly includes Aircraft Operating Income and Services. The Company also provides logistics and infrastructure that moves goods from the port to customers. Its port services include marine, handling intra-port transport, storage, other value-added and evacuation services for a range of customers, primarily terminal operators, shipping lines and agents, exporters, importers and other port users. The categories of cargo handled at the Company's ports are bulk, containers and crude oil. It operates approximately 10 ports/terminals spread across over five states of India, including Gujarat, Goa, Andhra Pradesh, Tamil Nadu and Odisha.
IDFC Securities Ltd., a subsidiary of the Infrastructure Development Finance Company (IDFC) wherein the Government of India holds a 20% interest, is India's leading equities broker catering to most of the prominent financial institutions, both foreign and domestic investing in Indian equities. A research team of experienced and dedicated experts ensures the flow of critically investigated stock ideas and portfolio strategies for our clients. Our coverage spans across various growth sectors such as agriculture, automobiles, Consumer Goods, Technology, Healthcare, Infrastructure, Media, Power, Real Estate, Telecom, Capital Goods, Logistics, Cement amongst other sectors. Our clients value us for our strong research-led investment ideas, superior client servicing track record and exceptional execution skills.
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