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The stock of Adani Ports and Special economic Zones (APSEZ) rose more than 7 per cent today after the announcement of strong financial results yesterday.
Both total income from operations and net profit ended 6.5 per cent and 31 per cent higher at Rs 1,827 crore and Rs 835 crore, respectively for the quarter ended June 2017 compared to the quarter ended June 2016.
Operating profit was Rs 1,170 crore, 4.8 per cent higher than the corresponding quarter last year.
APSEZ handled 42.33 million tonnes of cargo for the quarter ended June 2017, a 7 per cent increase compared to the same quarter in FY16.
Container traffic
The significant increase in profit came on the back of a 27 per cent increase in container traffic compared to the previous year, same quarter.
This increase in container traffic was predominantly led by growth in container volumes in the new east coast port of Kattupalli. Container volume in Kattupalli increased from 11,500 to 34,000 twenty foot equivalent units (TEUs) between the fourth quarter ended March 2016 and the first quarter ended June 2017.
Cargo handled at all the ports of APSEZ grew at 8 per cent in the quarter ended June 2017 over the March 2016 quarter; east coast ports showed a 36 per cent growth in cargo during the same period.
Coastal shipping
The company’s intention to increase its coastal shipping volumes is an encouraging sign. APSEZ intends to transport 4 million tonnes through coastal shipping. This is predominantly coal transportation from Dhamra Port in Odisha to Tamil Nadu for the power generating plant of Tamil Nadu Electricity Board.
The company is also considering supply of coal through coastal shipping to Andhra Pradesh Power Generation Corporation.
The emphasis on coastal shipping and the strategy to diversify and increase cargo such as iron ore, fertiliser and steel is expected to further assist the company’s growth in the future.
The stock price reached a peak price of ₹368 in August, 2015 before falling to reach ₹172 in May, 2016. The last trading price of APSEZ is ₹ 257.4 per share.
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