Morgan Stanley has raised its target price for Adani Ports and Special Economic Zone Ltd. to Rs 1,418 from Rs 1,415, citing the company's resilient business model and diversified cargo and geographical mix.
The brokerage maintained an 'overweight' rating on Adani Ports, highlighting the company's strategic approach to leveraging its integrated business model to reduce Ebitda sensitivity to cargo volumes.
Adani Ports has a well-diversified cargo mix and limited direct exposure to the USA, accounting for less than 5% of total cargo. Morgan Stanley forecasted volume to grow by 13% in FY26, reaching 510 million tonnes, driven by new capacity additions such as Vizhinjam port, WCT, Gopalpur, and Tanzania.
"India is likely to gain global share of goods exports, which bodes well for APSEZ's cargo growth. The strategy to leverage the integrated business model to reduce Ebitda sensitivity to cargo volumes is encouraging," the brokerage said.
India's potential trade deal with the US may take time, but is more likely than not, which could help India gain share in US trade over the medium to long term. Domestic leading indicators remain positive, further supporting Adani Ports' growth prospects, Morgan Stanley said.
The brokerage has trimmed FY26 and FY27 earnings estimates by 3% each due to a miss on FY25 volumes and assumed moderation for FY26-27.
The valuation has been rolled forward six months to March 2027, with the cost of equity assumption lowered to 12.5% from 13%, driven by a change in the risk-free rate to 6.5% from 7%.
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