On Thursday, Adani Ports fell 6.1%,
and declined 5% each, , and dropped 10% each. ACC ended almost unchanged over the previous day and Ambuja Cements jumped 5.3% after the Adani Group clarified that no shares of either of the companies have been pledged by promoters and they have only provided so-called, non-disposal undertakings.
Expansion Plans
Analysts said the withdrawal of the FPO has raised concerns over the group’s expansion plans as it planned to use part of the issue proceeds to fund growth and repay debt.
“While the company seems confident of being able to run planned operations and service upcoming debt obligation through internal accruals, it is almost obvious that the group will either need to pace out their ambitious expansionary roadmap or seek alternate sources of funding, which would come at a relatively higher cost,” said Nirav Karkera, research head of Fisdom, a Bengaluru-based investment service provider. “Market participants seem to be pricing in the fact that either way, the previously assessed growth prospects stand challenged and the probability of any upside is at least significantly deferred if not completely erased in the medium term.”
The decline has opened up investment opportunities in some stocks such as ACC, Ambuja Cement and Adani Ports, which are available at cheap valuations, according to analysts. However, none of the other stocks look attractive in quantitative and qualitative aspects even after the corrections, they said.
“Those who are eagerly looking to invest in Adani Group companies after the recent correction can consider Adani Ports, that too in a staggered manner,” said K Dileep, head of PMS, . “One can also bet on ACC and Ambuja Cements at this level as both these companies are debt free. Considering the proposed capex and infra spending announced in the budget, these stocks will create alfa over one-two years in the portfolio of retail investors.”
After a correction of nearly 40% in the past week, shares of are available at a PE of 18.8 times its trailing 12 months’ earnings compared with the five-year average PE of 23.5. The company is one of the leading port players in the world and is a market leader in India with a diversified cargo mix and end-to-end integrated logistics services. The company has maintained its volume guidance of 350-360 metric tonnes for FY23 and a consolidated ebitda guidance of Rs12,200-12,600 crore.
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