Adani Ports shares in focus after Q1 profit rises 7% YoY. Should you stay invested?
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Motilal Oswal
Avendus
Shares of Adani Ports and Special Economic Zone Adani Ports ) will be in focus on Wednesday after the company reported a 6.5% year-on-year rise in consolidated net profit to Rs 3,314.59 crore for the June quarter of FY26, supported by strong revenue growth.Revenue from operations jumped 31.2% YoY to Rs 9,126.14 crore, up from Rs 6,956.32 crore in the same period last year. EBITDA for the quarter rose 13% YoY to Rs 5,495 crore, compared to Rs 4,848 crore in Q1FY25.This quarter's 21% revenue growth is anchored by extraordinary momentum in the company's logistics and marine businesses, which grew 2x and 2.9x, respectively, according to the company's press release.Logistics revenue doubled year-on-year to Rs 1,169 crore, compared to Rs 571 crore in the same period last year. This performance was driven by an accelerated ramp-up in both trucking and international freight network operations. The company also secured approvals for EXIM (export-import) operations across multiple Inland Container Depots (ICDs), including Virochan Nagar in Gujarat, Kishangarh in Rajasthan, and Malur in Karnataka.The company's port operations recorded a cargo volume of 121 million metric tonnes (MMT) in the latest quarter, up 11% from 109 MMT a year ago. This growth helped Adani Ports expand its domestic market share to 27.8%, an increase of 60 basis points over the previous period.Motilal Oswal has retained its 'Buy' rating on Adani Ports with a target price of Rs 1,700.It noted that Q1 performance was slightly ahead of expectations, with continued focus on integrated transport utility transformation.The brokerage expects cargo volumes to grow at a 10% CAGR over FY25–27, while revenue, EBITDA, and PAT are projected to grow at 16%, 16%, and 21% CAGR, respectively. Management has guided for cargo handling of 505–515 MMT in FY26. Financials remain strong with Rs 16,900 crore in cash and net debt/EBITDA at 1.8x.Avendus has also maintained a 'Buy' rating, raising the target price to Rs 1,550 from Rs 1,450.It expects cargo volumes to grow at 14% CAGR over FY25–27, factoring in the NQXT acquisition in Australia. The Colombo greenfield port project is expected to support growth from FY26. EBITDA margins are likely to improve on the back of tariff hikes and cost efficiencies, with EBITDA CAGR projected at 17% for FY25–27. The stock is valued at 16x EV/EBITDA on FY27 estimates.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
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