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Strategic European bet adds to earnings muscles

ADSEZ has entered into an agreement to acquire 100% stake in Netherlands-based Evos B.V., Europe's 2nd largest independent liquid storage operator, from Igneo Infrastructure Partners at an EV of EUR2.56bn (11.7x CY25 EV/EBITDA). Evos operates 8 terminals across 5 European countries, with 6.3mn cbm of storage capacity and CY25 throughput of 37mmt. The acquisition will expand ADSEZ's global footprint from 20 to 28 ports and terminals across 10 countries, while more than doubling its liquid storage capacity. Evos reported CY25 EBITDA of EUR219mn with a margin of 56%, supported by 99% commercial occupancy, long-term contracted revenues and strong cash conversion. The transaction will strengthen ADSEZ's presence in European energy hubs, diversify its earnings base and expand its exposure to high-value liquid storage and sustainable fuels.

We view the acquisition positively, given Evos' high-margin operations and strategic presence across key European energy hubs. The addition of Evos should strengthen ADSEZ's international earnings contribution and improve its international ports EBITDA margin profile, while providing opportunities for growth through higher-value products, operating efficiencies and capacity addition in future. ADSEZ has demonstrated strong execution capabilities across its domestic acquisitions, although its ability to replicate these improvements in mature high-cost European market remains to be seen. While the debt-funded acquisition will increase leverage in the near term, Evos' contracted revenues and strong cash generation should support gradual deleveraging. Overall, we believe the transaction strengthens ADSEZ's long-term growth prospects, with relatively lower valuation and execution pedigree. We would incorporate Evos post consummation which would increase our FY28E/29E EBITDA estimates by ~10% each and PAT by 1/5% respectively. We expect ADSEZ to deliver EBITDA CAGR of 14% over FY26-29E. The stock is trading at EV of 15.9x/13.6x FY28/29E EBITDA. Maintain ‘BUY’ with TP of Rs2,248 valuing at same 18x EV of Sept’28E EBITDA

Evos adds high-margin liquid storage platform

ADSEZ has entered into an agreement to acquire a 100% stake in Netherlands-based Evos B.V. from Igneo Infrastructure Partners for an EV of EUR2.56bn (11.7x CY25 EV/EBITDA). Evos is Europe's second-largest independent liquid storage operator, with 8 terminals across 5 countries and 6.3mn cbm of storage capacity. The acquisition will expand ADSEZ's global footprint from 20 ports to 28 ports and terminals across 10 countries and more than double its existing liquid storage capacity. Evos' high-margin operations, contracted revenues and strong cash conversion should support earnings diversification. While the debt-funded transaction will increase leverage in the near term

Mgmt. expects the acquisition to contribute immediately to consolidated revenue and EBITDA without diluting ADSEZ's margin profile. Evos will also provide access to euro-denominated earnings and established European energy markets. The company intends to retain Evos' existing leadership team to ensure operational continuity.

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