Adani Ports, a prominent player in the maritime industry, witnessed a decline in its shares on August 8, in anticipation of its impending announcement of the June quarter earnings. Market analysts hold high expectations for the company, projecting a substantial growth in revenue driven by recent acquisitions. The addition of newly acquired assets is anticipated to contribute to an average low-20s revenue increase for the quarter. Adjusted profit, however, is predicted to be impacted negatively.
Kotak Institutional Equities elaborated on their projections, stating that they foresee a noteworthy 19 percent year-on-year improvement in revenue. This surge in revenue is expected to stem from a confluence of factors, including organic volume growth in the low-double digits, an increase in realization growth in the mid-single digits, and a boost from the acquisition of the Haifa port and logistics business, which is expected to contribute 2-3 percent to the total revenue. The underlying comparable volume growth is notably driven by robust expansion in container volumes, potentially soaring by 19 percent year-on-year.
In a strategic move earlier in the year, Adani Ports completed a significant acquisition by investing $1.2 billion to acquire Haifa ports in Israel. The Port of Haifa stands as Israel's second-largest port in terms of shipping containers and claims the distinction of being the largest port for tourist cruise ships. This acquisition is poised to play a pivotal role in enhancing Adani Ports' revenue and operational scope.
Phillip Capital, another market observer, anticipates that the YoY financial metrics will be impacted by the acquisition. A growth of 14 percent in revenue and an impressive 22 percent surge in net profit are expected. However, this growth might be accompanied by an impact on margins due to changes in the revenue mix and the company's international operations. Furthermore, foreign exchange losses are also factored into the equation, with an expected forex loss of Rs 380 crore in Q1FY24.
Kotak's predictions extend to the realm of EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), forecasting a year-on-year growth in the low double digits. This estimation is rooted in the assumption that there will be an increase in the share of businesses with relatively lower margins, such as the Haifa port and logistics operations.
In contrast, Incred Equities holds an optimistic outlook on the Q1 numbers, projecting an impressive 34 percent YoY growth in revenue. Nevertheless, they also anticipate a 9 percent decline in adjusted net profit. In terms of EBITDA, Incred Equities expects a more moderate growth of 18 percent YoY, slightly surpassing the 12 percent YoY growth in volume.
In the current market scenario, Adani Ports' stock experienced a 1.29 percent decrease, trading at Rs 781 on the Bombay Stock Exchange (BSE) as of 10:20 am. This shift is reflective of the market's cautious approach ahead of the company's Q1 earnings announcement and its anticipated financial impact.
