InvestorQ : What explains the sharp rally in the stock of Adani Ports SEZ in the last few days?
Rashi Mehra made post

What explains the sharp rally in the stock of Adani Ports SEZ in the last few days?

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Archita Jajjoo answered.
2 weeks ago
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Shares of Adani Ports Special Economic Zone (APSEZ) hit a new high of Rs 934 and has now surged 10% in just one week and more than 19% in a month. This is largely on the back of improved business outlook, and strong earnings expected to be announced in the June 2022 quarter. In fact, the first quarter Q1FY23 was the strongest in history for the company wherein the cargo volumes stood at a record with highest ever quarterly EBITDA of Rs3,005 crore. Even in July, the company had recorded 100 MMT of cargo through-put in 99 days.

Going ahead, APSEZ will commission 2 new terminals in coming months. The container terminal at Gangavaram Port in the state of Andhra Pradesh will become operational from September while the 5 MMT LNG terminal at Dhamra will go on stream from December 2022. The company had given FY23 cargo guidance of 350-360 MT and now looks to be on target, especially with the substantial coal cargo volumes. Its capex guidance stands at Rs23,000 crore by FY25. This is likely to restrict the ROE expansion of APSEZ.

For Fy23 overall, the reason for the spike in stock price of the company is due to the recovery in the import of thermal coal volumes. Apart from APSEZ’s persistent cargo diversification efforts, new tie-ups will also help container cargo recovery at Krishnapatnam. For now the outlook remains extremely positive.

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