Adani Ports and Special Economic Zone Ltd could gain greater visibility over the future of its key Gujarat ports after reports indicated that the state government plans to roll over port concessions, according to Jefferies.
The brokerage said the development would cover concessions at ports including Mundra, Adani Ports' flagship facility. The final terms are awaited, with the extensions expected to depend on the port operators' response to tariff-sharing and investment commitments.
The proposed rollover matters for Adani Ports because its three Gujarat ports — Mundra, Hazira and Dahej — account for 49% of the company's domestic port capacity. Greater clarity on the concessions would give the company visibility as it plans further capacity expansion at the ports.
Jefferies said Adani Ports operates Mundra with 274 million tonnes per annum of capacity, while Hazira and Dahej have capacities of 32 million tonnes and 16 million tonnes, respectively. The concession agreements for Mundra, Dahej and Hazira are due to end in February 2031, 2033 and March 2035, respectively.
The brokerage said the company has already indicated plans to expand capacity at Mundra and Hazira by 34%. The ports are operating at 66%-93% utilisation.
“This removes a major overhang and lends visibility for the operators,” Jefferies said in its note, referring to the reported plans for the concession extensions.
The brokerage said the economics of the final extension terms would remain important. It has a buy rating on Adani Ports and a target price of Rs 2,160, based on 16 times September 2028 estimated enterprise value to EBITDA, broadly in line with historical averages.
Jefferies cited an ET Infra report that said the Gujarat government intends to roll over port concessions for Gujarat Pipavav and Adani Ports' ports, including Mundra.
(Disclaimer: New Delhi Television is a subsidiary of AMG Media Networks Limited, an Adani Group Company.)
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