Shares of billionaire Gautam Adani's Adani Ports and Special Economic Zone Ltd rallied 3% in trade Tuesday (October 10) as global brokerage firm CLSA continue to be bullish on the blue-chip player amid a conflict in Israel. It said that war fears presents an even better buying opportunity.

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CLSA has suggested a 'buy' on the counter, with a target price of Rs 878 per share, indicating an upside potential of 8% from the current market levels.

Haifa's contribution to Adani Ports' numbers is "relatively small" at 3% of the total cargo volume. The global brokerage said that the port is a profit-making area focused on bulk and containers. "There is a scope for operating leverage by reducing employee costs," it said.

CLSA said the company expects a pay-back of 4 to 6 years under worst case scenarios. Further, it noted that the Israel-Palestine conflict has caused a 5% fall in stock for a 1.3% value for Haifa Port.

Meanwhile, domestic brokerage house Motilal Oswal has initiated a 'buy' on Adani Ports, with a target price of Rs 1,010. The brokerage believes cash flow generation will remain strong with controlled debt despite acquisitions.

"Improved reach, strategic port locations, operational efficiencies, and a comprehensive range of integrated service offerings (logistics, SEZs, etc.) have contributed to the company's remarkable growth," Motilal said.

Adani Ports continues to be in focus over mounting concern for the fate of the Haifa Port, which the Gautam Adani-led company controls in northern Israel after the Hamas-led attack on Israel triggered a geopolitical instability in the region.

Adani Ports in a statement said that it is closely monitoring the conflict in Israel and is prepared with a business continuity plan.

"We are closely monitoring the action on ground which is concentrated in South Israel, whereas Haifa Port is situated in the North. We remain fully alert and prepared with a business continuity plan that will enable us to respond effectively to any eventuality," it said.

Adani operates the Haifa Port in northern Israel along with a local company after it completed its purchase for 4 billion shekels ($1.03 billion) in January 2023.

Haifa is one of the main seaports in Israel, where about 99% of all goods move in and out of the country by sea.

Investor worries come as Palestinian Islamist group Hamas on Saturday launched the largest military assault on Israel in decades, killing hundreds of Israelis.

"The next couple of months are going to be volatile for Adani Ports as the war has just started and will trade with a negative bias ... Besides, it is not just Israel and Iran, but commodity prices will also get impacted," according to Avinash Gorakshakar of Profitmart Securities.

At 9:55 am, the scrip was trading 2.81% higher at Rs 812.25 apiece on the NSE. The Adani Ports stock is down 2.1% this year, compared with nearly 8% gains in the broader Nifty 50 index.