Buy Adani Ports and SEZ; target of Rs 1700: Motilal Oswal

Motilal Oswal's research report on Adani Ports and SEZ

APSEZ ended FY25 with 7% growth in total volumes to 450MMT, supported by a network of 15 ports/terminals across the country’s coastline, including India’s largest port at Mundra that handled ~200MMT of cargo in FY25. In India, APSEZ handled 431MMT cargo. In FY25, APSEZ domestic ports portfolio witnessed ~6% YoY volume growth, outpacing India’s cargo growth rate of 4%. In FY25, ~27% of all-India cargo volumes were routed through APSEZ ports. In FY26, the company is targeting cargo volumes of 505-515MMT.

Outlook

We expect APSEZ to report 10% growth in cargo volumes over FY25-27. This would drive a CAGR of 16%/16%/20% in revenue/EBITDA/PAT over FY25-27. We reiterate our BUY rating with a TP of INR1,700 (premised on 16x FY27E EV/EBITDA).