Adani Ports and Special Economic Zone Ltd: Buy

CMP: Rs.202.20

Triggers: 

(i) There has been a revival of the domestic output of coal coal which will help the port companies. The company is into expansion of capacities in their second terminal and is also getting into a transshipment mode it will build capabilities to get into transshipment which is a huge revenue spinner. Currently, all the business goes to Dubai and to Singapore. If Adani becomes capable for transshipment of cargo, it will be big boost the company's fundamentals.

(ii) Now, the latest quarterly results of Adani Ports and SEZ has seen a dramatic rise in the SEZ income, than earlier. This SEZ income is expected to get further boost due to the initiatives of the NDA government. 

As a vision of ushering India into a new era of urbanization induced growth, the NDA Government has already proposed to build 100 smart cities in India. Through the deployment of wide scale technologies & innovations, the project will involve integrated townships, infrastructure upgradation, transparent e-governance & better utilities. The smart cities will also encompass business clusters & Special Economic Zones (SEZ) to stimulate investment & employment opportunities. 

(ii) Meanwhile, the NDA government is considering several measures, such as offering incentives for small exporters and package to revive SEZs, to help reverse the trend of a prolonged contraction in merchandize exports since December, 2014.