'Buy' Adani Ports, Maintains Motilal Oswal, Says NQXT Australia Acquisition To Expand Global Presence

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Adani Ports and Special Economic Zone Ltd. has announced the acquisition of Abbot Point Port Holdings Pte. Ltd., Singapore, from Carmichael Rail and Port Singapore Holdings Pte. Ltd. (CRPSHPL) through a non-cash share-swap transaction. CRPSHPL is a related party.

APPH holds the entities that own and operate the North Queensland Export Terminal (NQXT), a dedicated export terminal with a current nameplate capacity of 50 million tonnes per annum. The terminal is located at the Port of Abbot Point, ~25 km north of Bowen, in North Queensland on Australia’s east coast.

The acquisition of APPH is being executed at an enterprise value of AUD3.97 billion (AUD 3.15 billion equity value and AUD819 million net debt). Adani Ports will issue 143.8 million new equity shares under the preferential allotment route to CRPSHPL, which will result in a net increase of 2.13% in promoter group holding. The acquisition implies an EV/Ebitda multiple of ~17x on FY25E Ebitda (10x based on FY29E Ebitda of AUD400 million).

This acquisition marks Adani Ports’ a strategic re-entry into NQXT, a critical asset previously held by Adani Ports between 2011 and 2013. The asset was sold by Adani Ports to Adani Group in 2013 as part of Adani Ports’ then-focus on domestic operations. With its India portfolio now stable and growing well, Adani Ports is resuming international expansion, aiming to scale total cargo volumes to 1 billion mt by 2030 (including 150 MT of volumes from international ports). This would mean ~15% growth from overseas operations, including NQXT.

The terminal’s geographical proximity to both the Bowen and Galilee coal basins and major Asian trade routes enhances its strategic relevance for Adani Ports’ east-west corridor strategy. The acquisition bolsters Adani Ports' international footprint, adding a high-performing, cash-generative asset with substantial scalability. It would help Adani Ports achieve its target of 1b MT of cargo by 2030.

The acquisition would provide a boost to international cargo operations. The nameplate capacity is 50 mtpa currently (40 mtpa is contracted). After the acquisition, Adani Ports targets a higher contracted capacity, contract renewals (improved pricing) and Adani Ports group synergies, which would boost Ebitda. It expects Ebitda to reach AUD400 million by FY29 (FY25E Ebitda at AUD228 million).

We have retained our estimates for now and would update our growth forecasts once the acquisition is completed. We expect Adani Ports to report 10% growth in cargo volumes over FY24-27. This would drive a CAGR of 14%/16%/21% in revenue/Ebitda/PAT over FY24-27. We reiterate our Buy rating with a TP of Rs 1,560 (premised on 15 times FY27 EV/Ebitda).

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