Adani Ports Gets 28% Target Price Hike From Cantor Fitzgerald On Initiation

Cantor Fitzgerald, a US-based brokerage has initiated coverage on Adani Ports and Special Economic Zone with an 'Overweight' rating, setting a target price of Rs 1,780 per share. This target implies a 28% upside. The brokerage highlights the company's positioning to capitalize on India's underdeveloped trade infrastructure, its solid financial track record, and expansion plans across ports, logistics, and marine services as key drivers for this positive initiation.

Cantor Fitzgerald forecasts mid-teens growth in revenue, Ebitda and cash flow through fiscal year 2029. The company's valuation is supported by its track record, with revenue, Ebitda, and operating cash flow having grown at approximately a 20% CAGR over the past five years.

Further, the brokerage anticipates a potential special dividend in fiscal year 2027, driven by strong free cash flow generation and the company maintaining low net leverage.

The company is positioned to benefit from India's ongoing infrastructure investments and its role in global trade, according to the brokerage. The company currently holds 27% share of the domestic port cargo market, a substantial increase from about 10% in 2015, and its container share has risen to 45.5% from 36% five years ago. This growth in market share is a testament to the company's expansion rate, which is three and a half times faster than the industry average.

The company aims to double its port capacity to 1 billion Metric Million Tons by 2030, a target well-supported by favorable government policies focused on infrastructure development. Beyond ports, logistics volumes are expected to grow fivefold by fiscal year 2029, fueled by the e-commerce sector, industrial growth, and public investment in infrastructure. The logistics segment is projected to achieve over 40% revenue CAGR.

Further, marine services are targeted to triple revenues between fiscal year 2025 and fiscal year 2027 through market expansion and asset additions, with a projected CAGR revenue growth of 21% through fiscal year 2029.

APSEZ's strategic coastal locations, diversified cargo mix, and growing global presence, including international ports in Israel, Tanzania, Sri Lanka, and Australia, are expected to significantly reduce business cyclicality.

Cantor Fitzgerald has provided a preview of Adani Ports first-quarter fiscal year 2026 earnings, which are scheduled to be reported on August 5. Based on the quarterly volume data released, the company handled a total of 120.6 MMT of domestic cargo, delivering 11% year-over-year rise. This growth was primarily driven by a 19% rise in container volumes.

The brokerage expects operating revenues to increase by 16% and Ebitda to rise by 17%, excluding a one-time gain recorded in the first quarter of fiscal year 2025.

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