Adani Ports Bags 'Buy' Rating As PL Capital Initiates Coverage

Sticky cargo, ability to pass on increase in costs, strong cash flow generation and potential in logistics business can drive even higher Ebitda growth over FY25-28E for Adani Ports.

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PL Capital Report

Though near-term risks are expected to persist due to global trade volatility amid trade wars and geopolitical tensions, long-term trade and India’s industrial growth will continue to aid the industry.

Adani Port - Riding the wave of India’s growth story

We initiate coverage on Adani Ports with ‘Buy’ rating and target price of Rs 1,777 per share assigning multiple of 18x Sep’27E EV/Ebitda. Adani Ports is India's largest commercial port operator, accounting for ~27% of all-India port cargo movements. Adani Ports has come a long way from a single port in Mundra in 1998 to an integrated transport utility company with 15 ports and supporting marine and logistics assets.

Port operations accounted for 58% of total revenue in FY25, with harbor (11%), logistics (9%) and other services (22%) contributing to the rest. Adani Ports clocked cargo volumes to the tune of ~450 mmt in FY25, of which bulk stood at 215 mmt (48%), container at 172 mmt (38%), liquid at 44 mmt (10%) and rest international.

With Indian economy expected to grow at a healthy rate over the next few years, we expect Adani Ports to witness strong double-digit volume growth over FY25-28E delivering ~16% Ebitda CAGR.

The stock is currently trading at enterprise value of ~13.4x/11.2x Ebitda of FY27E/FY28E.

JSW Infrastructure - Fueled by strong domestic steel consumption

We initiate coverage on JSW Infrastructure Ltd. with ‘Accumulate’ rating and target price of Rs 344 per share assigning EV/Ebitda multiple of 21x Sep’27E Ebitda.

JSW Infra is India's second largest private commercial port operator, accounting for 7% of all port cargo movements. Cargo-related operations accounted for ~67% of its total revenue in FY25, followed by vessel-related services (13%), storage (11%) and others including logistics (9%).

JSW Infra handled ~117mmt of cargo in FY25, with share of group cargo at ~51% and third-party cargo at 49%. The company plans to increase its cargo handling capacity to 400 mmt by FY30E via acquisitions, and brownfield and greenfield expansions.

We expect JSW Infra to deliver a strong 17% volume CAGR over FY25-28E to reach 185mmt led by JSW Steel’s ongoing Dolvi expansion, which is back-ended.

We expect revenue/Ebitda/PAT to grow at a CAGR of 23%/25%/20% over FY25- 28E.

The stock is currently trading at EV of ~21.8x/16.8x Ebitda of FY27E/28E. Initiate ‘Accumulate’.

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