ICICI Direct Bets On Large Cap Adani Group Stock, Sees 23% Upside, Declares 250% Dividend

Adani Group's firm Adani Ports and Special Economic Zone Ltd. (APSEZ) gets a Buy from ICICI Direct with a target price of Rs. 900/share. With the given target price, the stock is likely to give decent gains of up to 23% if purchased at the current market price.

On May 30, 2023, the Board of Directors of APSEZ recommends a dividend of Rs 5/share i.e. 250% of Rs. 2 each fully paid up for the financial year 2022-23. It is a Large cap stock with a market capitalisation of Rs. 1,58,133 crore.

250% Dividend

The company in an exchange filing said, "The Board has recommended a dividend Rs. 5/- (@ 250%) per equity share of Rs. 2/- each fully paid-up for the financial year 2022-23, subject to the approval of shareholder at the ensuing Annual General Meeting. The Company will inform in due course the date on which the Company will hold the Annual General Meeting for the year ended 31st March, 2023 and the date from which dividend will be paid or warrants thereof will be dispatched to the shareholders."

Q4FY23 Results

The performance was better than estimates on the topline front. Revenues grew 40% YoY to Rs. 5797 crore, supported by Haifa consolidation. Absolute EBITDA grew 27% to Rs. 3271 crore (margins contracted 590 bps to 56.4% due to higher employee and other expenses from Haifa port). PAT grew mere 5% to Rs. 1159 crore due to exceptional loss of Rs. 1273 crore.

Buy For a Target Price of Rs. 900/share

According to the broekrage, In the near term, APSEZ intends to prioritise a healthier balance sheet over growth (although the company has maintained its guidance of reaching 500 MMT by FY25). With a lower capex, its FCF has improved to 5-6% levels, which provides comfort on future expansion and debt levels. "We remain positive on the long-term growth prospects of the stock and maintain our BUY recommendation. We value the stock at Rs. 900 on an SOTP basis," the brokerage has said.

Stock Outlook

The stock of APSEZ last traded at Rs. 732.05/share. The stock traded its 52 week high at Rs. 987.85/share and 52 week low at Rs. 395.10/share, respectively. It jumped 7.8% in 1 month and 21.58% in 3 months, respectively. It fell 0,66% in 1 year. In 3 years, it gave 122.27% positive return and 88.87% in 5 years, respectively.

About - Adani Ports and Special Economic Zone Ltd. (APSEZ)

Adani Ports and Special Economic Zone (APSEZ) is the largest commercial port operator in India with 25% share of port cargo movement in India. The company has evolved from a single port dealing in a single commodity to an integrated logistics platform. Total ~70% of APSEZ's revenues is contributed by its port operations. Rest is led by harbour (11%), logistics (7%) and others. In FY23, container, bulk, liquid mix were at 36%, 55%, 9%, respectively.

Disclaimer - The stock has been picked from the brokerage report of ICICI Direct. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.