Adani Ports and Special Economic Zone Ltd. and JSW Infrastructure Ltd. are poised for sustained growth that is two to three times the industry average, said Motilal Oswal Financial Services Ltd. This is supported by continued organic and inorganic expansions and integrated logistics solutions, the brokerage said.
Adani Ports and Special Economic Zone Ltd. and JSW Infrastructure Ltd. are poised for sustained growth that is two to three times the industry average, said Motilal Oswal Financial Services Ltd. This is supported by continued organic and inorganic expansions and integrated logistics solutions, the brokerage said.
While the Adani Group company reported 15% volume growth on a compounded annual basis in the last five years, the JSW Group firm outperformed by 25% rise. These beat the industry's CAGR of 5% through aggressive capacity expansion, strategic acquisitions, and integrated logistics solutions.
"While the industry growth rate is expected to be 4-7% over the next five years, both APSEZ and JSWINFRA are poised for sustained growth of 2-3x the industry...Both of these companies are likely to gain market share," the note said.
Adani Ports
Adani Ports is showing strong performance with increasing market share, solid cash flow, and a manageable debt-to-Ebitda ratio. Motilal Oswal projects a 10% volume growth and significant CAGR in revenue, operating income and net profit through fiscal 2027.
The brokerage has maintained a 'buy' rating on Adani Ports stock, with a target price of Rs 1,400, implying a 26% potential upside over the previous close.
JSW Infra
Motilal Oswal projects JSW Infra will bolster its market leadership through stable port growth, increased third-party business, consistent JSW Group cargo, and portfolio expansion. This is expected to yield a 14% volume CAGR from fiscal 2024-27, driving 22% revenue and 21% Ebitda growth.
The brokerage has maintained a 'buy' rating on the stock with a revised target price of Rs 330, implying a 38% potential upside over the previous close.
India Port Sector Outlook
India's ports sector is vital for its economic growth, with government initiatives aiming to establish it as a global maritime hub. While policy support and private investment are driving progress, addressing delays, connectivity issues, and environmental concerns is essential, Motilal Oswal said.
The government's focus on coastal shipping, inland waterways, and port privatisation is expected to boost companies like Adani Ports and JSW Infra, allowing them to capture a larger share of India's port traffic.
Between FY23 and FY28, the country's ports are projected to add 500-550 MTPA of capacity annually, driven by increased handling of petroleum, oil, lubricants, coal, and containerised cargo. Cargo traffic is expected to grow at a steady annual rate of 3-6%, stabilising utilisation levels at 55% over the medium term.
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