Kotak Institutional Equities has maintained a Buy rating on Adani Ports & Special Economic Zone with a target price of ₹1,750, citing a well-executed capex cycle and a strong growth outlook for its logistics business.
Analyzing five-year annual reports, Kotak noted that Adani Ports has reduced external leverage while investing $4 billion in new port assets — nearly 4x the quantum from the previous five years — and creating a $2 billion logistics asset base.
With incremental capex now focused on brownfield expansion, Kotak expects Adani Ports’ logistics investment base to double to $4 billion in the next five years, with the potential for equity payouts to shareholders.
Additionally, post-tax funding costs (including debt and equity, and hedging) are around 8%, which bodes well for returns on new investments.
Disclaimer: The views and target prices mentioned in this article are as stated by Kotak Institutional Equities. They do not represent the opinions or recommendations of this publication. Readers are advised to consult their financial advisors before making any investment decisions.
