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Capturing global energy transition opportunity

Adani Ports & SEZ (ADSEZ IN) to acquire a 100% stake in Netherlands-based Evos B.V. from Igneo Infrastructure Partners for an EV of EUR 2.56bn and equity value of EUR 1.18bn, implying 11.7x CY25 and 11.4x CY26E EV/EBITDA. The all-cash, debt-funded deal is subject to regulatory approvals. Evos, Europe’s second-largest independent liquid storage operator, has 6.3mncbm capacity across eight terminals at seven ports in five countries, with strategic presence in Amsterdam-Rotterdam-Antwerp, Hamburg and the Mediterranean, supported by 452 tanks, 63 vessel/barge berths and integrated pipeline connectivity. It handled 37mn tonnes in CY25, generating EUR 392mn revenue (CY23-25 CAGR of 10%) with 56% EBITDA margin (up from 51%). High occupancy of 99%, investment-grade credit quality, tier-1 customers and long-term take-or-pay, CPI-linked contracts provide cash-flow visibility and inflation protection. The acquisition expands ADSEZ’s footprint from 20 to 28 ports/terminals and from five to 10 countries, adding a scaled European liquid-storage platform and diversifying its earnings base. We maintain our estimates for ADSEZ and reiterate Buy with a higher TP of INR 2,432 from INR 2,107.

Energy transition-led growth and ROCE expansion:

Evos offers ADSEZ exposure to Europe’s energy transition as the share of sustainable fuels is set to rise from ~20% to 50% of the fuel mix in 15-20 years. ADSEZ’s combined liquid storage capacity will rise to ~11.5mncbm. Growth opportunities lie in SAF, biofuels and methanol storage, diesel exports to Africa, blending, value-added services and higher tank utilisation. With no major near-term capex, ADSEZ aims to improve asset productivity and product realisation, lifting Evos’ ROCE from ~7% to double-digits in 2-3 years via a mix-led improvement rather than an operational turnaround. Evos brings engineering and R&D capabilities, long-term leasehold/freehold assets (some leases extending to 2092) and an established workforce, with existing leadership to continue and a five-year business plan to be developed post-completion.

Monitor cash generation, leverage and EPS:

Evos adds a high-margin, cash-generative business, with 56% EBITDA margin versus ADSEZ’s 44.8% international ports margin and 83% EBITDA-to-CFO conversion. Management expects cash conversion to sustain and indicated a double-digit PAT contribution relative to revenue. With ~EUR 1.43bn gross debt, ~EUR 1.37bn net debt and ~6x leverage, ADSEZ plans balance-sheet restructuring via eurodenominated borrowings, potentially lowering funding costs (~4.5% for Evos versus 6.4-6.6% for ADSEZ), while providing a natural currency hedge. Expect pro-forma consolidated net debt/EBITDA at 2.76x. Financing costs, debt restructuring and sustained cash conversion will be key to realising PAT and EPS accretion.

Maintain Buy with higher TP of INR 2,432:

While we are yet to factor in the acquisition in our estimates, the transaction enhances visibility on long-term shareholder value creation via building of a globally diversified, integrated ports & liquid storage platform and energy transition infrastructure. We maintain our estimates and roll forward to FY29E with a higher TP of INR 2,432 from INR 2,107, at an implied EV/EBITDA of 18x (unchanged) – Buy.

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