Buy Adani Ports & SEZ Ltd For Target Rs1,883 By Elara Capital
Diversified growth, stable earnings
Adani Ports & SEZ (ADSEZ IN) demonstrated the resilience of its diversified port – logistics
platform in Q3FY26, with containerization , transshipment and international assets offset
mix pressure from lower -margin adjacencies. Execution across ports, logistics and marine
continue s to improve, highlighting benefits of scale and integration. Incremental capacity,
higher overseas utilization , and logistics -led diversification are set to sustain ea rnings
momentum . We increase our earnings by 6% for FY26E, 8% for FY27E and 10% by FY28E , as
we factor in NQXT addition, ramp -up at Vizhinjam and higher -than -expected growth across
segments. We retain Buy with a higher DCF -based TP of INR 1, 883 on 16x FY28E EV/EBITDA .
Broad-based growth across verticals: Revenue grew ~22% YoY to INR 97bn in Q3FY26, driven by broad -based strength across verticals, led by logistics , up 62% YoY , and marine , up 91% YoY, while ports revenue rose ~15% YoY on steady domestic volume growth and a sharp ramp -up in international operations (Colombo, Haifa and Australia). EBITDA increased ~21% YoY to INR 57.9 bn, although margin moderated marginally to ~59.6% vs ~60.3% YoY , due to a higher contribution from lower -margin logistics and marine businesses. PAT rose ~21% YoY to INR 30.5 bn, supported by operating leverage, improving profitability at overseas ports , and sustained performance across core domestic port assets
Containerization drives growth: Container -led growth sustained cargo momentum in Q3FY26, with total cargo volume rising ~9% YoY to ~123 mn tonne , driven primarily by continued strength in containeri zed trade, where volume increased ~11% YoY to ~3.1 mn TEU. Growth was supported by the ongoing ramp -up at Colombo, higher transshipment activity , and incremental capacity utili zation at Mundra & Vizhinjam, reinforcing scale advantages across the network. Container market share improved to ~45.8% while reali zation a nd domestic port EBITDA margin remain resilient at ~73%, underscoring the structural shift toward containers and international assets that supports stable medium -term growth and profitability.
Adjacencies power growth upside: Marine and logistics remain strong growth drivers in Q3. Marine revenue rose ~90% YoY to INR 7.7bn, led by higher offshore deployment across the Middle East & the Africa n Union (AU) and a fleet of ~127 vessels, driving better utilization and operating leverage. Logistics revenue increased ~62% YoY to INR 11.2bn, led by steady traction in trucking, international freight, rail and inland Container Depot (ICD ) operations, while ongoing investments in multi -modal logistics parks, inland depots and digital platforms continue to strengthen APSEZ’s integrated logistics model & diversify earnings beyond ports.
Reiterate Buy with a higher TP of INR 1,883: Management continues to prioritize capital - efficient growth, improving ROCE and disciplined execution to sustain momentum. With consolidation of NQXT Australia Port from Q 4FY26 helped to retain FY26 guidance with revenue of INR 380bn, EBITDA at INR 228bn (raised by INR 8bn) and long -term FY29 target reven ue and EBITDA of INR 655 bn and 365bn , respectively . We retain Buy with a higher DCF - based TP of INR 1, 883 from INR 1,700 on 16x FY28E EV/EBITDA . We assume a WACC of 11%, terminal growth of 5%, a revenue CAGR of 12 % and EBITDA CAGR of 12% during FY25 -28E .
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SEBI Registration number is INH000000933
