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Strong 2Q volume recovery; expansion to drive growth

* All-India major port volumes increased 10% YoY in 2QFY27 and 8.1% in FY27’YTD, led by strong growth in container (+8%), POL (+7%) and coal (+7%) volume. Non-major port volumes inched up 1% YoY due to a 7% decline in coal volume. POL (petroleum, oil and lubricants) volume, with a cargo share of 26%, remained flat, while container cargo grew ~6%. APSEZ outperformed the industry, handling ~142mt of cargo in 2Q, up 15% YoY. Growth in 1H was driven by strong traction in dry cargo and containers, primarily led by NQXT, along with a recovery in container volumes following the slowdown caused by port disruption amid the Middle East crisis. On a YTD basis, APSEZ’s cargo volumes rose 15% YoY to 280mt, supported by healthy growth in container (+15%) and dry bulk (+15%) volume.

* In line with its vision of handling 1b tons of cargo by 2030, the company has recently received a letter of award (LoA) for the development and operation of two dry bulk berths at Paradip Port, Odisha. The project entails a capacity of 18mt and a concession period of 30 years, taking the company’s total capacity to 671mt. The terminal will strengthen its presence in eastern India and enhance its ability to handle coal, limestone and other dry bulk commodities.

* The recent expansion of Colombo Port’s capacity from 24mt to 48mt will enhance its ability to handle higher cargo volumes and accommodate larger vessels. APSEZ handled ~7mt of cargo at the port in 1QFY27 against the existing capacity of 24mt per annum. The expanded capacity provides significant headroom for volume growth, strengthening the port’s ability to capture rising transshipment demand and support APSEZ’s long-term cargo growth.

* With strong volume recovery in 2QFY27, particularly in dry cargo and containers, and improving earnings visibility, APSEZ remains well positioned to sustain its growth trajectory despite ongoing geopolitical uncertainties. Continued expansion of port capacity, marine services, and integrated end-toend logistics should support long-term growth. These initiatives reinforce APSEZ’s ambition to become India’s largest integrated transport utility by 2031, with Logistics and Marine emerging as key growth engines alongside its core port business. We reiterate our BUY rating with a TP of INR2,130, based on 17x FY28E EV/EBITDA.

Scale leadership and rising market share underpin long-term growth outlook

* APSEZ operates the largest private port network in India, with 15 ports and terminals across the West, South, and East coasts. The network offers a total capacity of 671mmt. It also operates four international ports in Israel, Sri Lanka, Tanzania, and Australia.

* The company has commissioned the Haldia bulk terminal in Mar’26, with a capacity of ~4mtpa and a draft of 8.5m, supported by a dedicated rail line and integrated conveyor system.

* APSEZ’s domestic market share stood at 27.6% as of Jun’26. Management highlighted that its domestic port volume growth over the past decade has been more than twice the industry growth rate.

* The container market share has also expanded steadily to 45.5% from 36% during Mar’20-Mar’26. Key capacity expansions, such as the automated Colombo West International Terminal and new berths at Dhamra, along with the rapid ramp-up of Vizhinjam, are strengthening APSEZ’s growth pipeline.

* Going forward, management retains its target of achieving 850mmt of domestic and 150mmt of international cargo volumes by 2030, with deeper integration into DFC-linked hinterland corridors and industrial clusters driving long-term growth.

Valuation and view

* With strong cash flows, a healthy cash balance of INR124b, and a net debt-toEBITDA ratio of 1.9x, APSEZ is well-positioned for further expansion. Capacity enhancements at key ports, ongoing infrastructure projects, and global port acquisitions provide visibility for stable growth in FY27 and beyond.

* APSEZ’s diversified cargo mix, port location and ongoing infrastructure investments are expected to support its volume growth. We anticipate APSEZ to report 14% growth in cargo volumes over FY26-28. This growth is likely to drive a CAGR of 17%/18%/21% in revenue/EBITDA/PAT over FY26-28E. We reiterate our BUY rating on the stock with a TP of INR2,130 (premised on 17x FY28E EV/EBITDA).

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