SBI Cap: Adani Ports and SEZ 1QF17 result review | TP – Rs303 (+26%) | Rating: BUY
Adani Ports and SEZ Ltd’s (APSEZ) 1QF17 results overshot SSLe, primarily driven by increase in cargo volumes across various ports. On a consolidated basis, APSEZ’s volumes grew 6.9% YoY to 42.3MMT (6% above SSLe) in 1QF17, mainly due to higher containers volumes and pick up in costal shipping. The company’s revenues grew by a healthy 6.5% YoY to Rs18.3bn, largely driven by - a) 6.9% YoY increase in volumes and b) higher SEZ income. On the operating front, EBITDA grew 7.1% YoY, whereas EBITDAM expanded 36bps YoY to 66.6% (SSLe: 65%). Margins expanded with the help of better cargo mix and optimization of port efficiencies. Adjusted PAT grew 29.6% YoY to Rs8.6bn (21% above SSLe) due to a) healthy top-line performance, b) rationalization of interest cost (down 23% YoY) and c) lower effective tax rate (6.9%) on account of MAT credit. Going forward, we expect APSEZ’s topline and bottomline to grow by a CAGR of 7.1% and 2.2%, respectively, over F16–F18e. We maintain BUY on the stock with a SOTP-based TP of Rs303
Adani Ports and SEZ Ltd’s (APSEZ) 1QF17 results overshot SSLe, primarily driven by increase in cargo volumes across various ports. On a consolidated basis, APSEZ’s volumes grew 6.9% YoY to 42.3MMT (6% above SSLe) in 1QF17, mainly due to higher containers volumes and pick up in costal shipping. The company’s revenues grew by a healthy 6.5% YoY to Rs18.3bn, largely driven by - a) 6.9% YoY increase in volumes and b) higher SEZ income. On the operating front, EBITDA grew 7.1% YoY, whereas EBITDAM expanded 36bps YoY to 66.6% (SSLe: 65%). Margins expanded with the help of better cargo mix and optimization of port efficiencies. Adjusted PAT grew 29.6% YoY to Rs8.6bn (21% above SSLe) due to a) healthy top-line performance, b) rationalization of interest cost (down 23% YoY) and c) lower effective tax rate (6.9%) on account of MAT credit. Going forward, we expect APSEZ’s topline and bottomline to grow by a CAGR of 7.1% and 2.2%, respectively, over F16–F18e. We maintain BUY on the stock with a SOTP-based TP of Rs303
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