Adani Ports surges 10% on robust business update for March quarter

Adani Ports

Shares of Adani Ports and Special Economic Zone (APSEZ) surged 10 per cent to Rs 814.95, also its fresh record high, on the BSE in the intra-day trade on Tuesday after the company reported a 41 per cent year on year (YoY) jump in cargo volume business at 26 million metric tonnes (MMT) in March. The stock of the Adani Group company surpassed its previous high of Rs 768.40, touched on March 8.

Earlier today, APSEZ said that it handled a cargo volume of 73 MMT in the January-March quarter of the financial year 2021 (Q4FY21). For the full FY21, APSEZ handled a cargo volume of 247 MMT, registering a growth of 11 per cent on a YoY basis.

Market share of APSEZ in container increased to 41 per cent of All India container volume in FY21. The west coast ports of APSEZ (Mundra and Hazira) handled 6.32 Mn TEU’s of container volume in FY21. The market share of western ports, the company said, has increased to 48 per cent in FY21 in the container segment.

In a separate regulatory filing on April 4, APSEZ informed the stock exchanges that the company has signed an agreement with Vishwa Samudra Holdings Pvt. Ltd., to acquire a 25 per cent stake in Adani.

“The company has signed an agreement with Vishwa Samudra Holdings Pvt. Ltd., to acquire a 25 per cent stake of Adani Krishnapatnam Port Limited for Rs 2,800 crore. This will result in APSEZ increasing its stake from 75 per cent to 100 per cent in Krishnapatnam Port,” it said.

Krishnapatnam Port is engaged in the business of handling containers, coal, breakbulk and other bulk cargo including liquid cargo. Krishnapatnam Port is an all-weather; deep water port that has a multi-cargo facility with a current capacity of 64 MMTPA. With a waterfront of 20 km and 6,800 acres of land, Krishnapatnam Port has a master plan capacity of 300 MMTPA and a 50-year concession.

The port is expected to have volumes of 38 MMT, revenues of Rs 1,840 crore and Ebitda (earnings before interest, taxes, depreciation, and amortization) of Rs 1,325 crore in FY21. Since the acquisition, Krishnapatnam Port has focused on business process re-engineering which has resulted in Ebitda margins improving from 57 per cent in FY20 to 72 per cent in FY21.

The management said Krishnapatnam Port is on track to handle double the traffic by 2025 and will deliver high growth through a multi-product and cargo enhancement strategy while enhancing return on capital employed. We are confident that we will be able to double throughput and triple Ebitda at Krishnapatnam Port by 2025, it said.

At 01:43 pm, the stock was trading 9 per cent higher at Rs 806, as compared to a 0.12 per cent decline in the S&P BSE Sensex. The trading volumes on the counter more-than-doubled with a combined 46 million equity shares having changed hands on the BSE and NSE till the time of writing of this report.