Adani Ports - Volume Growth Trajectory To Continue; Reiterate Buy Rating: Motilal Oswal

Motilal Oswal Report

Adani Ports and Special Economic Zone Ltd. ended FY24 with 24% volume growth in FY24 volumes, taking the total volumes to 420 million metric tonne, well surpassing even its revised guidance of 400 mmt. In FY24, ~25% of all-India cargo volumes was routed through Adani Ports. For FY25, the company is targeting cargo volumes of 500 mmt.

Adani Ports is continuously investing in building infrastructure for its logistics business. With 11 multi-modal logistics parks, 116 trains, 2.4 million square feet of warehousing space, and 1.1 million metric tons of grain silos, ALL aims to establish a nationwide presence by further developing logistic parks and warehouses.

Adani Ports continues to gain market share while generating strong cash flows and maintaining its leverage position, with a net debt-to-Ebitda ratio of 2.5 times as of December 2023.

We expect Adani Ports to register 10% volume growth and a compound annual growth rate of 14%/15%/19% in revenue/Ebitda/profit after tax over FY24-26. With consistent outperformance in cargo volumes, we reiterate our Buy rating with a target price of Rs 1,590.

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