Adani Ports and Special Economic Zone (ADSEZ) is well positioned to benefit from India’s long-term growth due to its strategic business model and alignment with the country’s development goals, according to a report by Macquarie Equity Research.
The report highlighted ADSEZ’s diversified port operations, strong cargo mix, and integrated logistics network as key factors supporting its resilience and long-term expansion.
The report said, “ADSEZ is well positioned to capitalise on India’s long-term growth potential due to its businesses’ thematic alignment with the nation’s development”.
The report has also initiated coverage on ADSEZ with an “Outperform” rating, citing the company’s ability to generate stable and recurring operating cash flows.
The report noted that the company’s partnerships and business mix provide strong revenue visibility, ensuring steady growth in the coming years.
It added that the ADSEZ has announced a capital expenditure (capex) plan of Rs 800 billion for the period FY25-FY29, significantly higher than the Rs 420 billion spent on organic growth between FY15-FY24.
The investment will focus on expanding domestic ports, with an allocation of Rs 450-500 billion, and the logistics business, which will receive Rs 200-250 billion. Additionally, ADSEZ is exploring international port expansion opportunities as part of its long-term strategy.
By 2030, the company aims to handle 800-850 million metric tonnes (MMT) of domestic cargo, which translates to an estimated 11 per cent compound annual growth rate (CAGR) between FY24 and FY31.
The report also expects ADSEZ’s revenue to grow at a CAGR of 14 per cent over FY24-FY27E, driven by a 12 per cent CAGR in domestic port revenue and 25 per cent CAGR in its expanding logistics business.
The report also highlighted the advantages of ADSEZ’s cargo diversity, port locations, strong hinterland connectivity, and early-mover advantage.
It said, “We believe the diversity of cargo handled, the locations of its ports, hinterland connectivity, customer partnerships, and its earlymover advantage are favourable factors.”
While EBITDA margins are expected to remain stable over FY25E-FY27E, the increasing contribution of the logistics segment, which operates at relatively lower margins, will balance overall profitability.
With a strong foundation in place and ambitious expansion plans, as per report the ADSEZ is well positioned to capitalize on India’s economic growth and strengthen its presence in both domestic and international markets.
