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

Motilal Oswal's research report on Adani Ports and SEZ

Adani Ports & SEZ (APSEZ) reported revenue growth of 31% YoY to INR91b in 1QFY26 (in-line). Cargo volumes grew 11% YoY to 121mmt. The growth was primarily led by containers. EBITDA margin came in at 60.2% in 1QFY26 vs our estimate of 60.1% (-80bp YoY, +120bp QoQ). EBITDA grew 29% YoY to INR55b (7% above our estimate), while APAT increased 28% YoY to INR34b (9% above our estimate). The all-India cargo market’s share increased to 27.8% (vs 27.2% in 1QFY25). The container market’s share stood at 45.2% (vs 45.9% in 1QFY25).

Outlook

We broadly maintain our estimates for FY26/27 and expect APSEZ to report a 10% growth in cargo volumes over FY25-27. This would drive a revenue/ EBITDA/PAT CAGR of 16%/16%/21% over FY25-27E. We reiterate our BUY rating with a TP of INR1,700 (premised on 16x FY27 EV/EBITDA).