Adani Ports Shares Fall Following Norges Bank Blacklisting

In Short

• Adani Ports shares drop after blacklisting by Norway’s Norges Bank
• Adani Ports’ market capitalisation now stands at Rs 2.88 lakh crore
• Adani Ports reported a net profit of Rs 2,040 crore for Q4 FY24

Shares of Adani Ports and Special Economic Zone Ltd (APSEZ) dropped nearly 2% to Rs 1,320.55 during early trading on Friday.

The decline followed the announcement that Norway’s central bank, Norges Bank, had blacklisted the Adani Group firm and two other entities, citing ethical concerns.

Norges Bank, which manages the world’s largest sovereign wealth fund, decided to exclude Adani Ports from its government pension fund.

The decision was based on concerns that the company contributes to “serious violations of individuals’ rights in situations of war or conflict.”

Following this news, Adani Ports shares fell over 1.8%, reaching Rs 1,320.55 on Friday.

The company’s total market capitalization now stands at approximately Rs 2.88 lakh crore. The stock had closed at Rs 1,344.75 in the previous trading session.

Adani Ports has been under observation since March 2022, and the exclusion is based on a recommendation from the Council on Ethics dated November 21, 2023.

The other two companies blacklisted by Norges Bank are US-based L3Harris Technologies and China’s Weichai Power.

The recent decline in Adani Ports shares has seen support around its 100-day moving average (DMA) set at Rs 1,250, according to Avdhut Bagkar, Derivatives & Technical Analyst at StoxBox.

Bagkar noted that if this support is maintained, the stock could potentially reach higher levels in future sessions, with the next major move projected to surpass Rs 1,400 and potentially reach Rs 1,550.

Adani Ports, India’s largest ports operator, reported a consolidated net profit of Rs 2,040 crore for the quarter ended March 2024, a 76.2% increase year-on-year.

The company recorded revenue from operations of Rs 6,896.5 crore, up 19% year-on-year.

At the operational level, EBITDA for the quarter increased 24% to Rs 4,045 crore, with the EBITDA margin improving to 58.6% from 56.4%.

With incremental cargo volumes of 100 million metric tons (MMT) achieved in less than two years, APSEZ is on track to achieve 500 MMT of cargo volumes by 2025.

BNP Paribas indicated that capital expenditure would increasingly be aligned to transform Adani Ports into an integrated logistics player, setting a target price of Rs 1,562.

However, BNP Paribas also noted potential investment risks, including slowing EXIM trade volumes and the worsening leverage metrics of the Adani Group.

JM Financial reiterated a buy rating for Adani Ports, adjusting its FY25-26 earnings per share (EPS) estimates by 2-3% to reflect Q4FY24 performance and an improved outlook.

They valued APSEZ at 18 times EV/EBITDA, arriving at a March 2025 target of Rs 1,660.