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14th Sept 2015


BSE: 532921 | Sector: INFRA

Q4FY15 consolidated revenue came at Rs16.7 bn +54.6% YoY led by
52 WK HI/LOW 374/244
better than expected realisations (company said they have taken 10-11%
price hike at Mundra and Dhamra port) , No SEZ Income booked in
EBITDA came in at Rs10.83 bn +73% driven by better than expected
margins from Mundra, Dahej, Hazira and Dhamra Port. EBITDA Margin BANKS, MFs & DIIs - 5%
came in at 64.9% against expectation of 62.3% (ex other operating
FIIs RS -66964
23% CRS
Standalone (Mundra port) EBITDA came in at Rs6.14 bn +23% YoY as PUBLIC - 7%
EBITDA Margin surged higher by 349 bps YoY at 66% (ex other
operating income). Margin expansion driven by price hike taken at KEY FUNDAMENTALS
Mundra Port and due to higher contribution from container terminal II

RevenuevScore (Value
growth Score)
driven is our proprietary
by price hike company rating system f SHAREHOLDING %
Q4FY15 standalone revenue came in at Rs9.34 bn +16.4% YoY. The
company reported volume decline of 8.7% at 26.8 mt versus expectation
of 29.5mt and realisations edged higher by 15% at Rs349/t against Promoters 56%
expectation of Rs325/t however adjusted realisations (adjusted for
container terminals CT-1 & CT-III) came in Rs443/t +9.3% YoY versus FiiS 32%
expectation of 415/t. The company took the blended 11% price hike at
Mundra Port .EBITDA came in at Rs6.14 bn +23% YoY versus DiiS 5%
expectation of Rs6.33 bn. The company net profit of Rs5.5 bn + 4.8%
YoY driven by tax write back. The company reported profit before tax Public 7%
Rs4.95 bn largely due to lower than expected other income.

Standalone net debt decreased by Rs25 bn at Rs98 bn as of Mar 2015.

The management said that debt has come down largely due to
repayment of debt worth Rs25 bn taken for Dhamra port acquisition. The
company repaid the debt in Oct 2014.

Consolidated revenue growth on higher than expected realizations

On consolidated basis volume stood at 36.38 MT +26.1% YoY driven by
Dahej and Hazira Port while volume was lower than expected from
Mundra, Dhamra and Dahej ports. Tuna (Kandla) began operations
during the current quarter. Dahej reported volume growth of 87.4% at 2.8
mt (expectation of 3.4 mt). Hazira reported volume growth of 171.3% at
2.6 mt (expected 1.8 mt). Dhamra Port reported volume of 3.22 mt
(expectation of 4.4 mt). The EBITDA Margins for Dahej/Hazira/Dhamra
stands at 59.3%/69.7%/75.2% against expectation of 54%/68%/60%
Business Outlook & Stock Valuation

Demerger to eliminate intra‐group funding risk

Build up in Rs 6bn receivables (largely from Adani Power) and Rs 22bn intercompany deposits/advances to
related parties over past couple of years stoked concerns of diversion of surplus cash towards group’s
funding requirement. With the recent demerger and management’s aggressive growth pursuit (organic and
inorganic), we anticipate more efficient utilisation of capital going forward. This will not only negate these
risks, but also further boost return ratios.

Since inception, Mundra Port & SEZ (MPSEZ) has posted 35% CAGR and handled 40 MT cargo in FY10,
higher than most other major Indian ports. Also, it has hedged cargo uncertainty risk by getting into long‐term
service contracts (45% of total cargo to be handled in FY14E). The port is expected to continue its current
growth momentum over the coming 2‐3 years,

MPSEZ, under the aegis of the parent company Adani Enterprises, has been instrumental in developing a
deep draft gateway port and SEZ strategically on the West coast of India with state–of‐the‐art infrastructure
and capability to handle diversified cargo. Such a third generation port acting as one‐stop‐shop for
export/import logistics is in unique league of ports and one of its kinds in India.

The company has a strong portfolio of projects on the Indian west coast other than the flagship Mundra port.
The projects are a mix of brown‐field port development i.e. currently at Dahej & Hazira and as terminal
operator at the major ports i.e. coal terminal under development at the Murmagao port. Such projects would
help the company gain a pan India presence. While the company is looking at setting up a large port on the
east cost of India, it has also been scouting for opportunities to go global and has recently evinced interest in
port development projects in Australia and Indonesia, in line with its long‐term strategy.

Adani Ports has been delivering stellar financial performance over the past couple of years despite a tough
business environment (25% volume growth against India’s 10% over last 4 years). In addition, it also utilised
this opportunity to acquire loss‐making scalable assets and successfully turned them around within a year.
We hence expect long term prospects to remain good as the Indian economy recovers ground.


For the Year Ended March RsCrs FY14A FY15A FY16E FY17E
Net Sales 4824.1 6152.2 8390.2 9950.1
EBIDTA 2977.80 3974.6 5109.1 6125.5
Profit After Tax 1943.1 2043.2 2990.5 3712.2
Diluted EPS (Rs) 9 10 14 18

Equity Capital 416.8 416.8 416.8 416.8

Reserves 8351 10352 13010 16250
I, Avinash Gorakshakar, Research Analyst Registration no INH000001071 comply with the qualification and certification requirements under SEBI
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