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Vivek

Vivek Shah  |55 Answers  |Ask -

Financial Planner - Answered on Feb 14, 2023

Vivek Shah is a SEBI registered investment advisor and certified financial planner from FPSB India. He has over 18 years of experience in financial planning.
Shah founded Finrise, a financial planning and wealth management firm, in 2011. He believes that equity investment is the only way to generate long term wealth.
He has an MBA in finance, a degree in chartered accountancy and is a registered life planner from Kinder Institute of Life Planning, USA.... more
Krishan Question by Krishan on Feb 14, 2023Hindi
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Is it a good time to invest in Adani ports (currently trading @ 550 level)?

Ans: First of all we need to understand the questions being asked by Hindenberg and try to evaluate whether the allegation made by them makes any sense. If anyone goes through the Hindenberg report than the allegations and questions asked can be bifurcated into below broad categories:

1) Violations of Exchange and listed rules
2) Dubious Intra- Party Transactions
3) Use of Shell companies outside india ( Mauritius) to manuipulate the stock price
4) Money laundering through private Adani companies in listed companies of Adani inorder to look Balance sheet good.
5) Inexperienced Chartered accountants to audit the companies.
6) Using stocks as collateral for debt.

Looking at Adani Port, this company is best placed amongst the Adani companies.
Let’s looks at some of its strenghths:
1) Strong cash-generating ability from core business - Improving Cash Flow from operation for the last 2 years.
2) Book Value per share Improving for last 2 years
3) Company with decreasing Promoter pledge
4) Debtor days have improved from 80 to 57 days.
5) Company's median sales growth is 18.7% of last 10 years
Now lets look at the weakness and cons of investing in this company:
1) Valuation seems to be still higher but better placed now as compared to before this fall
2) Promoter holding has decreased over last quarter: -0.89%
Lets analyse Q3 results:

• Performance largely in line.
• Absolute EBITDA grew 15% to Rs 3011 crore (margins remained range bound at 62-63% levels – higher realisation negated by change in product mix).
• PAT de-grew 16% to Rs 1316 crore due to forex loss of Rs 315 crore
• Since major capex is behind APSEZ, the management expects to repay and prepay some bonds, NCDs and maintain debt/EBITDA in the 2.5x range. It has not had incorporate loans and deposits for two to three years.
• Total - 18% growth in EBITDA includes current growth deceleration in Exim movement
• ICD Tumb (Vapi) and Haifa port are expected to fully contribute in FY24 in logistics and port vertical, respectively
• QoQ slowdown in the bulk segment is mainly due to higher duties on iron ore, steel, fertiliser, sugar, etc, and ban on wheat, etc
• The management has prioritised loan repayment and prepayment over other immediate inorganic growth initiatives (debt/EBITDA to be maintained at 2.5x in the near term). However, strategic initiatives may be evaluated as time comes.
• APSEZ has Rs 3000 crore of cash (FD) and another Rs 2200 crore of overdraw (not yet utilised). In a hypothetical event, the company can deploy its entire capital base (~ Rs 42000 crore) to raise cash.
• Also, 22% of gross debt, which amounts to ~Rs 8500 crore, is secured and APSEZ has pledged 1.25x of its assets. The company intends to repay Rs 1600 crore of this secured debt. In FY24, pledging is expected to reach nil.
• Haifa port has been consolidated into APSEZ’s book as on Q4FY23
• Of the Rs 4000-4500 crore capex planned in FY24, Rs 3500-3800 crore would be utilised in ports division, rest in logistics vertical. Karaikal port acquisition (Rs 1500 crore) is a part of the planned capex.
• FY24 capex has been lower as majority of the project based capex has occurred in FY23 and the management expects to ramp up logistics capex as and when demand reaches current capacity.
• Total 100 trains would come online for Adani Logistics in FY24.
Looking at this numbers of Q3 and management concall highlights it looks attractive after the current fall with a price target of Rs 800 in near term but an investor should also look at Gujarat Pipavav Port where there is a MNC promotor ( (Maersk Group). The port container capacity is at 1.35 million TeUs.
As a retail investor, one should do the due diligence based on the above points and then one must consider the decision of investing in the company.

Disclaimer: This is just for educational purpose and this should not be taken as advise for buy or sell.
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Vivek

Vivek Shah  |55 Answers  |Ask -

Financial Planner - Answered on Feb 23, 2023

Asked by Anonymous - Jan 27, 2023Hindi
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Good Time To Buy Adani Stocks?
Ans: First of all we need to understand the questions being asked by Hindenberg and try to evaluate whether the allegation made by them makes any sense. If anyone goes through the Hindenberg report than the allegations and questions asked can be bifurcated into below broad categories:

1) Violations of Exchange and listed rules
2) Dubious Intra- Party Transactions
3) Use of Shell companies outside india ( Mauritius) to manuipulate the stock price
4) Money laundering through private Adani companies in listed companies of Adani inorder to look Balance sheet good.
5) Inexperienced Chartered accountants to audit the companies.
6) Using stocks as collateral for debt.

Looking at this points and also the allegations done by Hindenberg, i am fine to believe that there few acts which they taken for granted and manipulate the exchange and listing rules but calling Adani company as CON or Fraud is not what i would call this company. Companies margin are very low as compared to their cost of capital but being an infrastructure led company its takes long gestation period to realise the cash flows. Adani is playing important role in building infrasturcture in India with ports, power, airports etc and even though company is highly levered to build the assets and cash flow, the company has good physical assets in the balance sheet. Even though it may not a investible company for a retail invstor with the sort of volatility and margins they are earning.

Valuations are very much stretch with last 2 years price going to the roof. As a retail investor, one should avoid this company due to many uncertainties going forward.


Disclaimer: This is just for educational purpose and this should not be taken as advise for buy or sell.
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Vivek

Vivek Shah  |55 Answers  |Ask -

Financial Planner - Answered on Feb 07, 2023

Asked by Anonymous - Feb 07, 2023Hindi
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Money
Is it safe to invest in Adani stocks now?
Ans: First of all we need to understand the questions being asked by Hindenberg and try to evaluate whether the allegation made by them makes any sense. If anyone goes through the Hindenberg report than the allegations and questions asked can be bifurcated into below broad categories:

1) Violations of Exchange and listed rules
2) Dubious Intra- Party Transactions
3) Use of Shell companies outside india ( Mauritius) to manuipulate the stock price
4) Money laundering through private Adani companies in listed companies of Adani inorder to look Balance sheet good.
5) Inexperienced Chartered accountants to audit the companies.
6) Using stocks as collateral for debt.

Looking at this points and also the allegations done by Hindenberg, i am fine to believe that there few acts which they taken for granted and manipulate the exchange and listing rules but calling Adani company as CON or Fraud is not what i would call this company. Companies margin are very low as compared to their cost of capital but being an infrastructure led company its takes long gestation period to realise the cash flows. Adani is playing important role in building infrasturcture in India with ports, power, airports etc and even though company is highly levered to build the assets and cash flow, the company has good physical assets in the balance sheet. Even though it may not a investible company for a retail invstor with the sort of volatility and margins they are earning.

Valuations are very much stretch with last 2 years price going to the roof. As a retail investor, one should avoid this company due to many uncertainties going forward.

Disclaimer: This is just for educational purpose and this should not be takne as advise for buy or sell.
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My daughter did her graduation in November 2023 from a top-ranked university in Canada - University of British Columbia, Vancouver (QS World Rank within 35). She is interested in a job in the fields of Artificial Intelligence and related software domains. She graduated with an interdisciplinary BSc in Cognitive Systems, including several courses from Computer Science, Artificial Intelligence and Machine Learning, Neuroscience, etc.. Unfortunately, unlike in US universities, there's no Campus Placement facilities available in UBC and most Canadian universities. Please advise how to get into a job in this gloomy economic scenario, in Canada (USA is ruled out because OPT is not available for non-US university graduates).
Ans: Hello Indranil. Thanks for reaching out to us. Given your daughter's background in cognitive systems with coursework in computer science, Artificial Intelligence, Machine Learning and Neuroscience from a prestigious institution like the University of British Columbia (UBC), she has a strong base for having a career in AI and related fields. Although no campus placement is challenging, there are ways to find a job while keeping in mind the gloomy economic condition.

1. Encourage your daughter to leverage her professional network, including alumni, professors, and industry contacts. Attending industry events, seminars, and meetups can provide valuable networking opportunities and help her connect with potential employers or mentors in the field of AI and software development.

2. An online presence, such as having an account on LinkedIn, is important. She can showcase her skills and achievements—both academic and extracurricular—so far, reach out to professionals,etc

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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