India's extensive coastline and increased investments in inland waterways, coastal shipping, and port privatization initiatives by the government are expected to benefit companies like Adani Ports and Special Economic Zone Ltd. and JSW Infrastructure Ltd., enabling them to handle a larger share of volume at Indian ports.
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Motilal Oswal Report
India's ports sector is crucial to its trade ambitions and economic growth. With focused policy support, private investments, and infrastructure development under initiatives such as Sagarmala and the Maritime Amrit Kaal Vision 2047, India is well positioned to emerge as a global maritime hub.
However, addressing challenges related to policy delays, connectivity gaps, and environmental concerns will be the key to unlocking the sector's full potential.
India's extensive coastline and increased investments in inland waterways, coastal shipping, and port privatization initiatives by the government are expected to benefit companies like Adani Ports and Special Economic Zone Ltd. and JSW Infrastructure Ltd., enabling them to handle a larger share of volume at Indian ports.
Adani Ports (Buy) – The largest private port operator in India:
Adani Ports continues to gain market share while generating strong cash flows and retaining its leverage position, with a net debt-to-Ebitda ratio of two times as of Sep'24. We expect Adani Ports to register 10% volume growth and a CAGR of 14%/15%/19% in revenue/Ebitda/ PAT over FY24-27.
With consistent outperformance in cargo volumes, we reiterate our Buy rating with a target price of Rs 1,400 (based on 15 times Sep'26 EV/Ebitda).
JSW Infra (Buy) – Scouting for organic and inorganic expansions:
Considering stable growth levers at its existing ports and terminals, a higher share of third-party customers, sticky cargo volume from JSW Group companies, and an expanding portfolio, we expect JSW Infra to strengthen its market dominance, leading to a 14% volume CAGR over FY24-27. This should drive a 22% CAGR in revenue and a 21% CAGR in Ebitda.
We reiterate our Buy rating with a revised target price of Rs 330 (premised on 22x Sep'26 EV/Ebitda). JSW Infra is also our top pick in the ports domain.
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