ADANI PORTS STOCK MAY SEE 30% PRICE RISE IN ONE YEAR

A multi-modal terminal under the Jal Marg Vikas Project is being executed on the Haldia-varanasi stretch with the technical assistance and investment support of the World Bank on a 50:50 sharing basis between the Government of India and the World Bank. The project involves the construction of three multi-terminals at Varanasi, Sahibganj and Haldia, integrated vessel repair and maintenance facilities, a Global Positioning System and river training and river conservancy works. A port based multi-product Export Zone is being developed by JNPT, which is the country’s largest port. On the other hand, the Sagarmala Pariyojana is focusing on enhancing the performance of the logistics sector in

India by setting up mega ports, modernising existing ports, and developing 14 Coastal Employment Units. The Sagarmala has identified more than 600 projects at a total cost of Rs 8.8 lakh crore and projects worth Rs 4.32 lakh crore are under various stages of implementation and development. Since ports are the drivers of socio-economic change and aid the long-term growth trajectory of any economy, the government is striving to develop ports into manufacturing ecosystems that attract trade as well as investments. Currently, the Indian logistics industry is highly fragmented, with organised players accounting for around 10% of the total market share. With the customer base including a wide range of industries such as retail, automobile, telecom, pharmaceuticals and heavy industries, the logistics industry requires significant investments. There is a need for an organised logistics policy that removes approvals and communications with multiple agencies, ensures effective monitoring and follows a complete tech-driven approach. This is turn will help India’s logistics sector leap into becoming one of the most promising sectors of the Indian economy. According to rating agencies, India’s logistics industry is projected to be worth over $200billion in the next few years. Adani Ports posted Q4FY20 results with net sales at Rs 2,921 crore, down 5.23% over the same period of last year while the net profit plunged 74% to Rs 334 crore from Rs 1,285 crore as of last fiscal due to the Covid impact. The Adani Ports stock has seen negligible impact of the results and has been hovering in the Rs 310 range for some time. Though it is not an investment for the short term, investors can buy the Adani Ports stock for a 30% price appreciation in oneyear time frame.

Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.

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