Adani Ports & Special Economic Zone Ltd. now has a market value of about $37 billion, surpassing Beijing-Shanghai High-Speed Railway Co. The rise in cargo volumes and inclusion in India’s benchmark S&P BSE Sensex Index are driving this growth. “It’s just the beginning for Adani Ports,” said Deven Choksey, managing director at DRChoksey FinServ Pvt. The company is expanding naturally, generating cash, and managing millions of metric tons of cargo.
Record-Breaking Cargo Volumes
Adani Ports handled 27% of India’s total cargo and 44% of container cargoes in the year ending March 31, with a 24% increase in volumes from the previous year. Ten of its domestic ports achieved their highest-ever cargo volumes. Analyst Priyankar Biswas from BNP Paribas Securities India Pvt. highlighted the company’s growth potential due to its strong balance sheet and appetite for acquisitions. Recently, Adani Ports agreed to buy India’s Gopalpur port and a majority stake in a Tanzanian container terminal.
Inclusion in Benchmark Index
Starting Monday, Adani Ports will trade on India’s benchmark equity gauge, expected to attract $252 million in flows, according to Nuvama Alternative & Quantitative Research.
However, Adani Ports faces risks after India’s recent election, as noted by Bloomberg Intelligence analyst Denise Wong. The stock dropped more than 20% on June 4 after Prime Minister Narendra Modi’s alliance won a narrow majority but has since recovered some losses. “Adani Ports may face uncertain earnings growth under India’s new coalition government,” Wong wrote. She also noted that Adani Group companies might be subject to increased regulatory scrutiny.
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