ADANIPORTS

Navigates War-Linked Headwinds

(APSEZ) has seen its stock fall ~9% to ₹1,381 since the West Asia conflict began on 28 February. The decline would have been sharper but for strong business updates, with cargo volumes rising 11% YoY to 46 MT in March. For FY26, volumes grew 11% to 501 MT, slightly below guidance of 505–515 MT. Analysts note resilience in both domestic and international operations, though prolonged conflict could weigh on container-linked volumes. Operational Performance - Mundra Port: offset estimated container losses with transshipment gains, as global ports diverted Middle East-bound cargo. - Haifa Port (Israel): volumes rose MoM from 0.59 MT to 0.77 MT, showing no war impact so far; contributes ~2% of APSEZ volumes. - Colombo terminal: handled record monthly volume of 134,960 TEUs. - Logistics rail and wagon volumes: grew 6% and 18% MoM in March. - Restart of Tata Power’s Mundra plant, reliant on imported coal, provides a tailwind. Financial & Valuation Outlook - JM Financial cut FY27E EBITDA by 7% but left FY28 estimates unchanged. - Target price reduced to ₹1,725 (from ₹1,800), still implying ~25% upside. - Motilal Oswal and Nomura remain positive, with targets of ₹1,820–1,850, valuing APSEZ at 15x FY28E EV/EBITDA. - Rising bond yields (10-year G-sec at 7%) make equities less attractive overall, but not specific to APSEZ. Long-Term Expansion - Mundra Port capacity: currently 264 MT, planned expansion to 514 MT with ₹45,000 crore capex. - Expansion to include LNG handling in cryogenic ships. - Management aims to nearly double FY26 volumes to 1,000 MT by FY31, implying ~15% CAGR versus 13% achieved in FY17–FY26. Conclusion Despite near-term geopolitical risks, Adani Ports has demonstrated operational resilience. With strong international performance and ambitious capacity expansion, the company remains positioned for long-term growth, though investor sentiment will hinge on execution and conflict duration.