The Norwegian central bank, Norges Bank, banned the Adani Group company and two other firms from its portfolio on Friday morning, citing ethical concerns. This resulted in a decline in the share price of Adani Ports and Special Economic Zone Ltd (APSEZ).
The largest sovereign wealth fund in the world, the Sovereign Wealth Fund, is managed by Norges Bank.
Adani Ports in India was chosen by the bank's executive board to be left out of its government pension fund due to the possibility that the operator supports "serious violations of individuals' rights in the situation of war or conflict."
Adani Ports and Special Economic Zone Ltd.'s shares dropped more than 1.8% to Rs 1,320.55 on Friday as a result of this news.
At now, the market capitalization of the firm amounts to around Rs 2.88 lakh crore. The previous trading session's closing price of the stock was Rs 1,344.75.
Since March 2022, Adani Ports has been under scrutiny. According to Norges Bank, the decision to exclude the corporation was made in response to a proposal by the Council on Ethics dated November 21, 2023.
China's Weichai Power and the US-based L3Harris Technologies are the other two businesses that Norges Bank has placed on a blacklist.
According to Avdhut Bagkar, a derivatives and technical analyst at StoxBox, the 100-day moving average (DMA) of Adani Ports shares, which is now trading around Rs 1,250, has provided support for the company's recent slide.
"It is expected that the price action will rise in the upcoming sessions until this support point is held. The next significant rise is expected to be over Rs 1,400, which appears to be a temporary hurdle. According to Avdhut Bagkar, Business Today, "the price is expected to reach Rs 1,550 once this mark is crossed."
The biggest port operator, Adani Ports, announced a consolidated net profit of Rs 2,040 crore for the quarter that concluded in March 2024. Year-over-year (YoY), the company's profit increased by 76.2%.
The Adani Group company reported Rs 6,896.5 crore in operating revenue, a 19% YoY increase.
Operationally speaking, EBITDA rose 24% to Rs 4,045 crore for the quarter, while the EBITda margin expanded to 58.6% from 56.4%.
Given that it took less than two years to reach incremental cargo quantities of 100 MMT, APSEZ is well-positioned to reach 500 MMT of cargo volumes by 2025.
According to BNP Paribas, capital spending will progressively line up to turn Adani Ports into an integrated logistics operation.
This resulted in a target price of Rs 1,562 and included the Gopalpur acquisition in its valuation at the purchase price, offset by reduced Ebitda expectations for the logistics segment.
"Slowing EXIM trade volumes and worsening of Adani Group leverage metrics are the key investment risks," it stated.
According to JM Financial, the company restated its measured expansion strategy, putting special emphasis on the logistics industry.
"We adjust our FY25–26 EPS by 2-3% to account for the better outlook and 4QFY24 results. After the Q4 results, JM Financial issued a buy recommendation on APSEZ, stating that it is valued at 18 times EV/Ebitda and has set a target price of Rs 1,660 for March 2025.
