5 Key reasons why Adani Ports share is a good stock to buy

Adani Ports & Special Economic Zone Ltd (APSEZ) has firmly established itself as a market leader in India’s port and logistics sector, combining robust operational capabilities with a strong financial profile. With an extensive domestic and international presence, strategic acquisitions, and steady growth in cargo volumes, the company continues to attract investor attention.

Its consistent performance, diversified revenue streams, and ambitious expansion plans make it one of the most compelling investment opportunities in the infrastructure space.

About Adani Ports & Special Economic Zone

Adani Ports and Special Economic Zone Ltd (APSEZ), founded in 1998, develops, operates, and maintains port infrastructure while managing a linked multi-product Special Economic Zone (SEZ) at Mundra.

Through its subsidiary, Adani Logistics, it operates logistics parks in Patli (Haryana), Kila-Raipur (Punjab), and Kishangarh (Rajasthan). APSEZ primarily serves B2B customers, handling dry cargo, liquid cargo, crude, and containers, and offers integrated services across ports, logistics, port-based services, and SEZ operations. The stock trades at Rs. 1,516.75 and has a market capitalization of Rs. 3,27,639.07 crore.

Here are five key reasons why investors should consider buying Adani Ports & Special Economic Zone. 

Market Leadership in Ports and Logistics

APSEZ operates 15 domestic ports and four international terminals, with a combined cargo handling capacity of 633 MMT as of September 2025. It commands 28 percent of India’s overall cargo and 46 percent of container volumes, reflecting its leadership position.

Volumes have grown at a CAGR of 12 percent between fiscal 2017 and 2025, supported by consistent capex and strategic acquisitions, including Kattupalli, Krishnapatnam, Gangavaram, Karaikal, and Gopalpur. Internationally, APSEZ operates in Colombo, Sri Lanka; Dar-es-Salaam, Tanzania; and Haifa, Israel, with the upcoming acquisition of NQXT further expanding its global footprint.

In the first half of fiscal 2026, volumes grew 11 percent year-on-year and operating income increased 25 percent, continuing the trend from fiscal 2025 when operating income rose 14 percent to Rs. 30,741 crore. Growth was driven by steady port operations, capacity additions across multiple terminals, and expansion of logistics and marine businesses.

The company is actively expanding its logistics and marine operations, with logistics revenue doubling to Rs. 2,224 crore and marine business revenue tripling to Rs. 1,182 crore in the first half of fiscal 2026. Within the logistics segment, APSEZ plans to significantly grow its trucking operations, primarily to support the logistics needs of its other group businesses, including power and cement.

Operational Efficiency and Revenue Diversity

APSEZ has maintained operating margins above 60 percent, reflecting strong efficiency across ports and allied logistics. Turnaround time averages 0.7 days, significantly faster than the 2 days typical for major Indian ports. Fiscal 2025 saw a margin of 60.9 percent, slightly higher than 60.1 percent in fiscal 2024. With the scaling up of non-port operations, overall margins may moderate to around 55 percent, while port operations continue at 70 percent.

The cargo mix is diversified, with coal at 33 percent, containers 42 percent, crude and gas 6 percent, and other cargo filling the rest. Mundra Port’s share of total cargo has declined from 66 percent in fiscal 2019 to 45 percent in fiscal 2025, while the eastern coast now contributes 40 percent of total volumes. 

Logistics and related businesses accounted for 17 percent of revenue in fiscal 2025 and are expected to grow further, supported by a trucking fleet of 937 units, 12 multi-modal logistics parks, 132 trains, 127 marine vessels, grain silos with 1.3 MMT capacity, and warehousing space of 31 lakh sq. ft. This wide network allows the company to offer end-to-end solutions to its clients, resulting in strong cargo retention, with 56 percent classified as sticky. 

Strong Financial Health

APSEZ has steadily reduced leverage, with net debt-to-EBITDA at 1.97 times in March 2025, down from over 3 times in March 2023, and 1.82 times as of September 2025. Gross debt stood at Rs. 51,082 crore with Rs. 13,063 crore in cash and equivalents. Debt protection remains robust, with adjusted interest coverage at 8.09 times and net cash accrual to adjusted debt at 0.31 times in fiscal 2025. Expected operational cash flows of over Rs. 16,000 crore comfortably cover debt obligations of Rs. 3,000-10,000 crore through fiscal 2028.

The company’s foreign currency debt exposure is largely hedged, and most of its debt is non-amortizing, minimizing refinancing risk. Leverage is expected to remain capped below 2.5 times net debt-to-EBITDA, even as growth continues through acquisitions and capex.

Ample Liquidity for Growth

Liquidity is supported by strong cash accruals, moderate bank utilization, and a cash balance of Rs. 13,063 crore as of September 2025. Capex requirements over FY25–30, including acquisitions, are expected in the range of Rs. 12,000-18,000 crore, ensuring continued expansion without stressing financial stability.

Growth Outlook

Management targets 1 billion tonnes of cargo by FY29, with 150 MMT from international operations. Post-acquisition of NQXT, visibility on international volumes is already 146 MMT, suggesting potential to exceed the target. Capex of Rs. 450–550 billion is planned for international expansion, part of a total FY25-30 capex of Rs. 750 billion.

Key priorities include container capacity expansion at Mundra, Vizhinjam, and Dhamra (from 60 to 92 MMT per annum) and investments in liquid berths and tank farms at Hazira. Logistics ROCE improved to 9 percent in 1HFY26, with a long-term target of 10 percent and EBITDA margins of 40-45 percent. International port EBITDA margins are expected to reach up to 65 percent post NQXT integration. Overall, management targets 16 percent ROE at the APSEZ level.

Positive Analyst View

JM Financials highlights that FY26 EBITDA is on track to exceed guidance of Rs. 210–220 billion, despite potential minor shortfall in cargo volumes. EBITDA forecasts for FY26–27 are likely to be upgraded given strong OCF translation and deleveraging. Analysts have set a 12-month target of Rs. 1,795, implying potential upside of 21 percent from the current market price of Rs. 1,485.

Financial Snapshot – Q2FY26

In Q2FY26, Adani Ports & Special Economic Zone reported sales of Rs. 9,167 crore, up marginally from Rs. 9,126 crore in Q1FY26, reflecting a modest increase of 0.45 percent. Operating profit declined from Rs. 5,495 crore to Rs. 5,340 crore, a decrease of 2.83 percent, while PBT fell from Rs. 3,848 crore to Rs. 3,690 crore, down 4.08 percent. Net profit decreased from Rs. 3,311 crore to Rs. 3,120 crore, marking a drop of 5.76 percent quarter-on-quarter.

Compared to Q2FY25, the company demonstrated strong growth. Sales rose from Rs. 7,067 crore to Rs. 9,167 crore, up 29.7 percent, while operating profit increased from Rs. 4,367 crore to Rs. 5,340 crore, a rise of 22.3 percent. PBT expanded from Rs. 2,885 crore to Rs. 3,690 crore, an increase of 27.9 percent, and net profit jumped from Rs. 2,413 crore to Rs. 3,120 crore, up 29.4 percent year-on-year, underscoring the company’s robust financial performance and operational resilience.

-Manan Gangwar 

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