In an interaction with CNBC-TV18 on Thursday, November 28, Orton said that he was worried that the recent allegations on the Adani Group would lead to more selling from foreign institutions in the Indian markets and the fact that it has not happened, has encouraged him.
Interestingly, foreign institutions have been net buyers in the Indian cash market over the last three trading sessions, one being the MSCI Adjustments and Wednesday’s being a small figure of ₹8 crore.
Orton believes that he wants to look at Adani Ports as a separate entity as an investment case.
“It’s a name I wouldn’t be adding to positioning right now, but it’s not what I would be selling at these lows, because, again, it plays into the infrastructure theme,” Orton said.
There are very strong fundamental drivers for Adani Ports that are not at all tied to the issues that the US Department of Justice (DoJ) is investigating, according to Orton, who also shared a timeline for when the stock can become an attractive investment case, although with a caveat.
“I think once there’s some more clarity, once we get through another earning season, I think buying the dip could be attractive, assuming that they continue to deliver strong results,” the Raymond James analyst said.
Adani Group stocks are recovering over the last two trading sessions after Adani Green, in an exchange filing on Wednesday, said that Gautam Adani, Sagar adani and Vneet Jain have not been charged with any violation of the FCPA in the counts set forth in the indictment of the US Department of Justice or the civil complaint of the US Securities and Exchange Commission (SEC).
Out of the 18 analysts that have coverage on Adani Ports, 16 of them have a “buy” rating on the stock, while the other two say “hold”. The stock does not have a “sell” recommendation from analysts.
Shares of Adani Ports are currently trading little changed at ₹1,200. The stock is down 26% from its recent peak of ₹1,621. For the year, the stock is up 15%.
