In the wake of the Supreme Court’s decision relieving the Adani Group in the Hindenburg case, HSBC upgraded the target price for Adani Ports and Special Economic Zones, resulting in a 1.24 percent gain in the stock’s value at the opening bell on January 4. The new target price stands at Rs 1,250, and at 9:20 am, the stock was trading at Rs 1,112.90.
The Supreme Court’s dismissal of petitions related to the Hindenburg case, coupled with the rejection of conflict of interest claims, played a pivotal role in restoring investor confidence. Notably, the court also urged a SEBI probe into Hindenburg’s short-selling allegations.9
Looking ahead, HSBC anticipates that Adani Ports may become more receptive to inorganic opportunities and strategic balance sheet adjustments. The company recently reported handling approximately 35.65 MMT of cargo volumes in December 2023, marking a robust 42 percent YoY increase.
For the fiscal years 2023-26, HSBC analysts project a 17 percent Compound Annual Growth Rate (CAGR) in the company’s EBITDA, with Return on Invested Capital (ROIC) expected to climb from 13 percent in FY23 to 17 percent in FY26.
In a regulatory filing on January 4, Adani Ports announced the board’s approval to raise funds up to Rs 5,000 crore through non-convertible debentures, further indicating the company’s strategic financial moves. Additionally, changes in key leadership positions were approved, including the re-designation of Gautam S Adani as Executive Chairman and Karan Adani as Managing Director.
The stock market response to the HSBC upgrade and the Supreme Court verdict demonstrates the impact of legal outcomes on investor sentiment and strategic outlook for major corporations.
