Adani Ports Upgraded to Hold as Technicals and Financials Show Strength

Technical Trends Shift to Bullish Momentum

The primary catalyst for the rating upgrade is the significant improvement in APSEZ’s technical profile. The technical trend has shifted from a sideways pattern to a bullish trajectory, supported by multiple indicators. On a weekly basis, the Moving Average Convergence Divergence (MACD) remains mildly bearish, but the monthly MACD has turned bullish, indicating strengthening momentum over the longer term. The Relative Strength Index (RSI) shows no immediate signal on both weekly and monthly charts, suggesting the stock is not overbought or oversold.

Bollinger Bands have turned bullish on both weekly and monthly timeframes, signalling increased volatility with an upward price bias. Daily moving averages are firmly bullish, reinforcing short-term strength. The Know Sure Thing (KST) indicator is mildly bearish weekly but bullish monthly, while Dow Theory readings are mildly bullish weekly and mildly bearish monthly, reflecting some mixed but generally positive technical signals. On-Balance Volume (OBV) is bullish on both weekly and monthly charts, indicating strong buying interest.

These technical improvements have propelled the stock price to ₹1,530.90 as of 4 February 2026, up 9.12% from the previous close of ₹1,402.90. The stock is trading near its 52-week high of ₹1,548.60, with a daily high of ₹1,537.50 and a low of ₹1,475.00, underscoring the bullish momentum.

Strong Financial Performance Supports Upgrade

Adani Ports’ financial trend remains robust, further justifying the upgrade. The company reported its highest quarterly net sales of ₹9,704.59 crores and a record PBDIT of ₹5,786.03 crores in Q3 FY25-26. Net sales have grown at an annualised rate of 25.20%, while operating profit has expanded by 27.01%, demonstrating healthy operational leverage and margin improvement.

Return on Capital Employed (ROCE) for the half-year period stands at a strong 14.40%, reflecting efficient capital utilisation. The company has delivered positive results for 12 consecutive quarters, signalling consistent earnings growth and operational stability. These financial metrics underpin the company’s ability to generate sustainable returns and support its elevated valuation.

Quality Assessment: Consistent Growth and Promoter Confidence

The company’s quality grade remains solid, supported by its consistent growth trajectory and rising promoter confidence. Promoters have increased their stake by 2.13% over the previous quarter, now holding 68.02% of the company’s equity. This increase is a strong signal of promoter conviction in the company’s future prospects.

Long-term returns have been impressive, with APSEZ generating 40.84% returns over the past year, significantly outperforming the Sensex’s 8.49% return in the same period. Over three years, the stock has delivered a staggering 206.89% return compared to the Sensex’s 37.63%, and over ten years, the stock has surged 629.35% against the Sensex’s 245.70%. This market-beating performance highlights the company’s ability to create shareholder value consistently.

Valuation: Expensive but Discounted Relative to Peers

Despite the strong fundamentals, the valuation remains on the expensive side. APSEZ trades at an enterprise value to capital employed ratio of 3.5, which is considered high. The company’s Price/Earnings to Growth (PEG) ratio stands at 2.4, reflecting a premium valuation relative to its earnings growth of 18.9% over the past year.

However, the stock is trading at a discount compared to the average historical valuations of its peers in the transport infrastructure sector. This relative valuation discount, combined with strong growth prospects, supports the Hold rating rather than a Buy, indicating that while the stock is attractive, it is not undervalued enough to warrant a more aggressive stance.

Technical Summary and Market Context

APSEZ’s technical indicators present a nuanced picture. While weekly MACD and KST are mildly bearish, monthly indicators are bullish, suggesting that the stock is in the early stages of a sustained uptrend. The bullish Bollinger Bands and moving averages reinforce this view. The stock’s recent price action, including a 12.22% return in the past week compared to the Sensex’s 2.30%, highlights strong near-term momentum.

Given the mixed signals, the upgrade to Hold reflects a balanced view that acknowledges the improving technical backdrop while recognising the need for caution given the stock’s valuation and some short-term technical softness.

Outlook and Investment Implications

Adani Ports & Special Economic Zone Ltd’s upgrade to Hold reflects a more constructive outlook driven by improved technical momentum and solid financial results. The company’s strong operational performance, consistent earnings growth, and rising promoter stake provide a foundation for sustained value creation.

Investors should note the premium valuation and mixed technical signals, which counsel a cautious approach. While the stock has outperformed the broader market and its sector peers over multiple time horizons, the current price levels suggest limited upside in the near term without further fundamental catalysts.

For long-term investors, the company’s leadership position in the transport infrastructure sector, combined with its robust financial health and market-beating returns, make it a compelling holding. However, those seeking immediate gains may prefer to monitor technical developments closely before increasing exposure.

Summary of Key Metrics

As of 4 February 2026, APSEZ’s key metrics include:

• Current Price: ₹1,530.90
• 52-Week High/Low: ₹1,548.60 / ₹1,036.35
• Market Cap Grade: 1 (indicating large-cap status)
• Mojo Score: 64.0 (Hold rating, upgraded from Sell)
• Annualised Net Sales Growth: 25.20%
• Operating Profit Growth: 27.01%
• ROCE (Half Year): 14.40%
• PEG Ratio: 2.4
• Promoter Holding: 68.02%, increased by 2.13% QoQ
• Returns: 1 Year - 40.84%, 3 Years - 206.89%, 10 Years - 629.35%

These figures highlight the company’s strong fundamentals and market position, justifying the revised Hold rating.

Conclusion

The upgrade of Adani Ports & Special Economic Zone Ltd from Sell to Hold is a reflection of its improving technical outlook and sustained financial strength. While valuation remains elevated, the company’s consistent growth, rising promoter confidence, and market-beating returns provide a solid investment case. Investors should weigh the bullish technical signals against valuation considerations and maintain a balanced perspective on the stock’s near-term potential.

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