Adani Ports downgraded to reduce - TP Rs.124 - Geojit BNP Paribas Financial Services

- Adani Ports & SEZ has been downgraded to 'reduce' with a target price of Rs.124.

- After a strong outperformance YTD (12% over the Sensex), share price of Adani Ports is factoring in high growth, posing downside risk.

- It is estimated that the 19% volume CAGR in FY08-12 would slow to 12% in FY12-17.

- It seems that the divestment of Abbot Point is fully priced in at current levels.

- Media reports indicated that Adani has finalized terms and conditions to buy Dhamra Port at an enterprise value of Rs.5500 crore. This acquisition is expected to be earnings dilutive in the near term.

- The stock is rated to 'reduce' with a target price of Rs.124.

- Company specific upside risks include positive surprises in volume/ realization, accretive acquisitions and a favorable outcome on the pending investigations on illegal mining.

Source : Equity Bulls

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