Adani Ports Q1 results preview: Sales likely to grow 15-20%, profit may jump sharply

Adani Ports and Special Economic Zone (APSEZ), a Adani Group firm, will declare its June quarter results on Tuesday. The port operator is likely to report a strong performance on year-on-year (YoY) basis, even as sequential numbers (QoQ) would be mixed.

Analysts expect revenue for Adani Ports to rise 15-20 per cent YoY. Sales may remain flat on a sequential basis. Net profit may rise 25-75 per cent YoY and 20-70 per cent QoQ. Ebitda may improve in low-double digit growth while Ebitda margins may contract 400-700 basis points (bps), as share of lower margin business is seen increasing.

Nuvama Institutional Equities expects a robust Q1FY24 on the back of strong volumes in ports and similarly a significant growth in the logistics business after a strong quarterly update by the company.

In the quarterly update shared last month, Adani Ports said that its total cargo volumes in the June quarter rose 11.5 per cent YoY to 101.4 million tonne, with growth across major ports and cargo segments. Container volumes grew 19 per cent, liquids and gas volumes increased 8 per cent, and dry bulk volumes rose 7 per cent.

The company handled 32.8 million tonnes of cargo in June, which includes 1 million tonnes from the recently acquired Haifa port in Israel. Investors will be keenly looking at the management's commentary on debt reduction plans and guidance for the ongoing fiscal year.

Kotak Institutional Equities expects Adani Ports to report a revenue of Rs 6,000 crore in Q1FY24, up 19 per cent YoY and 4 per cent QoQ. The brokerage sees 70-75 per cent growth in net profit on both QoQ and YoY basis at Rs 1,980 crore. It sees Ebitda expanding 12 per cent to Rs 3,664 crore. However, Ebitda margins may ease 400 bps to 61 per cent.

"We model improvement in revenues, driven by a combination of organic volume growth, realization growth and boost from Haifa port and logistics business. Underlying comparable volume growth is driven by very strong growth in container volumes," said Kotak. "We model a low YoY growth in Ebitda, assuming increasing share of lower margin businesses (Haifa port, logistics)".

Shares of Adani Ports and Special Economic Zone gained more than 2 per cent to settle at Rs 791.60 on Monday. The port services provided commaninded a total market capitalization more than Rs 1.7 lakh crore. The stock is up 10 per cent in the last one month, while it flat on a year-to-date basis.

Phillip Capital sees Adani Ports' revenue at Rs 5,746 crore, up 14 per cent YoY but flat sequentially. The brokerage expects PAT coming in at Rs 1,410 crore, up 22 per cent both YoY and QoQ. EBITDA is seen improving marginally at Rs 3,325 crore, while EBITDA margins may come in at 58 per cent, falling 718 basis points YoY.

The brokerage expects acquisition impact on YoY numbers and margins might ease due to revenue mix and international operations. Forex loss could come in at Rs 380 crore in 1QFY24, compared to Rs 1,160 crore a year ago. It has assumed an effective tax rate of more than 21 per cent in 1QFY24 which was -7 per cent in 1QFY23.

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