Adani Ports and Special Economic Zone Limited is India’s largest private port and Special Economic Zone which was incorporated as Gujarat Adani Port Ltd (GAPL) on 26 May, 1998 to develop a private port at Mundra, on the West Coast of India. Currently the company is in the business of development, operations and maintenance of port infrastructure (port services and related infrastructure development) and has linked multi product Special Economic Zone (SEZ) and related infrastructure contiguous to Port at Mundra. APSEZ Ports with its wide presence handles a wide variety of cargo ranging from coal, crude, containers to fertilizers, agri products, steel & project cargo, edible oil, chemicals, automobiles etc. The Co.’s business verticals include a comprehensive network of ports & terminals (82% of total revenue), Logistics (8%), SEZ & Ports (6%) and Operations and Maintenance (4%).  It is India’s largest private port player with 627* MMT cargo handling capacity and, 2.4 mn sq ft Warehousing space and 12 Multimodal logistics parks.

Under its Ports business vertical it operates 15 ports across coastline of India & have international presence with operations of 4 ports outside India. Out of 15 ports, 8 ports are multipurpose ports located at Mundra (264 MMT) and Hazira (30 MMT) in Gujarat, Dighi (8 MMT) in Mahrashtra, Karaikal (22 MMT) in Puducherry, Kattupali (25 MMT) in Tamil Nadu, Krishnapatnam (75 MMT) and Gangvaram (64 MMT) in Andra Pradesh and Dhamra in Odisha. It has 5 Bulk terminals located at Dahej (16 MMT) and Tuna (14 MMT) in Gujarat, Marmugao (5 MMT) in Goa, Gopalpur (20 MMT) in Odisha and Haldia (4 MMT) in West Bengal along with 2 container terminals in Ennore (12 MMT) in Tamil Nadu and Vizhinjam (18 MMT) in Kerala which is under construction. On international front company operates Israel’s Largest Port, Haifa Port along with operating and management contracts for Abbot Point Port in Australia and Dar Es Salaam port in Tanzania and container terminal at Colombo, Sri Lanka.

Under its SEZ business, company has India’s largest SEZ at Mundra with Land Bank of 12,500+ Ha. It also has industrial zones at Dhamra and Krishnapattam with land bank of 2000+ Ha each. In total it has 16,500+ hectares of Port, SEZ and Non-SEZ land bank. Its Logistics business consists of 111 Marine Flotila, 690 Kms of Rail tracks, 127 trains, 5 Multi Modal Logistics Park, 1.2 MMT Grain Silos, 2.4 mm Sq. Ft. Warehousing capacity and 900 trucks which enables end to end service to customers from Port Gate <-> Customer Gate.

APSEZ has handled 420 MMT marking 24% Y-o-Y growth in cargo in FY24 including international ports, with domestic ports contributing Over 408 MMT cargo. It has also handled its highest ever monthly cargo volumes (incl. international ports) of over 38 MMT in March 2024. Mundra Port handled its highest-ever monthly cargo volume of 17.1 MMT in March 2024, which is also the highest by any Indian Port. AICTPL (CT-3, Mundra) created India level record of handling highest ever container volumes in a month and in a year (3 Lakh TEUs in November 2023 and 3 Mn TEUs in FY24), Mundra Port’s CT-4 handled its highest-ever monthly container volumes of 1,24,164 TEUs in March 2024.Company’s Gangavaram Port handled its highest-ever monthly cargo volumes of 4.0 MMT in January 2024, Krishnapatnam Port handled its highest-ever monthly cargo volumes of 5.7 MMT in May 2023, Tuna Terminal handled its highest-ever monthly cargo volumes of 1.15 MMT in March 2024, Ennore Container Terminal handled its highest-ever monthly containers in November 2023, crossing 65,000 TEUs and Kattupalli Port handled its highest-ever volume in a single month crossing 76,000 TEUs in February 2024.

Company has also recorded Highest-ever rail volumes of 0.6 Mn TEUs (Twenty-foot equivalent units) and Highest-ever GPWIS volumes of 20.1 MMT (Million metric tonnes) with 67% Ports capacity utilization and 22,589 MT/day Operational productivity for dry cargo in FY24.

Company’s 5 ports recorded the arrival of the largest/deepest ship ever in their history which includes Mundra Port which berthed one of the largest ships ever – MV MSC Hamburg, 399 m long and 54 m wide, with a carrying capacity of 15,908 TEUs and a current reported draught of 12 m, Krishnapatnam Port which berthed the largest vessel with dimensions 335.94 m LOA and 42.94 m Beam, Gangavaram Port berthed its deepest draft vessel of 18.12 m, Karaikal Port which successfully docked a 14.08 m deep draft vessel (Gloria G) and Kattupalli Port which safely berthed MV Seaspan Beacon, a 10,000 TEUs vessel and a container vessel with a 14.5 M draft and displacement of 1,28,046 T.

Fundamentals (FY23-24):

Financial Results:

Company reported Net Sales of Rs 6,896.50 crore in March 2024 up 18.97% from Rs. 5,796.85 crore in March 2023.Its Quarterly Net Profit was at Rs. 2,039.66 crore in March 2024 up 76% from Rs. 1,158.88 crore in March 2023. Company’s EBITDA stands at Rs. 4,347.29 crore in March 2024 up 19.01% from Rs. 3,652.95 crore in March 2023. Adani Ports EPS has increased to Rs. 9.44 in March 2024 from Rs. 5.36 in March 2023.

Key Highlights:

1. Adani International Ports Holdings Pte Ltd. (AIPH), a wholly owned subsidiary of Adani Ports and Special Economic Zone Ltd. (APSEZ), has signed a 30-year concession agreement with the Tanzania Ports Authority to operate and manage Container Terminal 2 at the Dar es Salaam Port, Tanzania. Dar es Salaam Port is a gateway port with a well-connected network of roadways and railways and CT2, with four berths, has an annual cargo handling capacity of 1 million TEUs and managed 0.82 million TEUs of containers in 2023, estimated to be 83% of Tanzania’s total container volumes.
2. The company has acquired the 56% stake of the SP Group and 39% of Orissa Stevedores Limited (OSL) in Gopalpur Port Limited (GPL) at an enterprise value of INR 3,080 crore. Gopalpur port is located on the east coast of India and has the capacity to handle 20 MMTPA.
3. The company has entered into a second strategic partnership with Terminal Investment Limited (TiL), the container terminal operating and investing arm of MSC, the largest container shipping line in the world, for the operation of Adani Ennore Container Terminal Pvt Ltd (AECTPL).
4. U.S. International Development Finance Corporation (DFC) recently announced that it will be funding Colombo West International Terminal Pvt. Ltd. (CWIT) – a consortium of Adani Ports and SEZ Ltd., Sri Lanka's leading enterprise John Keells Holdings (JKH) and the Sri Lanka Ports Authority – to the tune of USD 553 million.
5. The company has also set a new benchmark by handling the highest-ever rail cargo of 120.51 MMT in the FY23, surpassing the previous best of 98.61 MMT. APSEZ is committed to providing end-to-end logistics. Under the General-Purpose Wagon Investment Scheme (GPWIS) of Indian Railways, cargo handled by rail has grown by 62% YoY. Mundra Port handled over 15,000 container trains in FY23, cementing its position as India's EXIM gateway. In FY23, APSEZ generated around Rs 14,000 crore in revenue from rail cargo for Indian Railways.
6. The company has also acquired Karaikal Port Private Limited (KPPL) which operates Karaikal Port in FY23 which is an all-weather deep-water port on India’s eastern coast that was developed on the Build, Operate and Transfer format under the Public-Private Partnership by the Government of Puducherry. It is the only major port between Chennai & Tuticorin, and its strategic location allows the port easy access to industrial-rich hinterland of Central Tamil Nadu.
7. The company has also acquired Oil tanking India GmbH’s 49.38% equity stake in Indian Oiltanking Ltd (IOTL), which is one of India’s largest developer and operator of liquid storage facilities. This agreement also includes acquisition of an additional 10% equity stake in IOT Utkal Energy Services Ltd, a 71.57% subsidiary of IOTL. Over the last 26 years, IOTL has built a network of six terminals across five states with a total capacity of 2.4 Mn KL (owned capacity of 0.5 Mn KL and BOOT capacity of 1.9 Mn KL) for storage of crude and finished petroleum products. The owned facilities include Navghar terminal in Maharashtra, Raipur terminal in Chhattisgarh and Goa terminal. The BOOT terminal with Indian Oil Corporation Ltd (IOCL) is at Paradip (Odisha) and O&M contracts with IOCL are at JNPT (Maharashtra) and Dumad (Gujarat). The company also has a biogas plant of 15 TPD capacity in Namakkal (Tamil Nadu).
8. Adani Agri Logistics Ltd (AALL), a wholly-owned subsidiary of Adani Logistics Ltd, has received a Letter of Award (LoA) from the Food Corporation of India (FCI) to develop and operate state-of-the-art silo complexes at four locations – Kanpur, Gonda and Sandila in Uttar Pradesh and Katihar in Bihar, in line with the Government of India’s objective of modernizing India’s storage infrastructure, creating a total silo storage capacity of 3.5 lakh MT.
9. Adani Logistics Ltd (ALL), a wholly owned subsidiary of Adani Ports and Special Economic Zone Ltd (APSEZ), has signed a definitive agreement to acquire the ICD “Tumb” (Vapi) from Navkar Corporation Ltd for an enterprise value of Rs 835 Cr. The deal comprises acquisition of the operational ICD with capacity to handle 0.5 million TEUs.
10. AD Ports Group, the leading facilitator of global trade, logistics, and industry, has signed a Memorandum of Understanding (MoU) with Adani Ports and SEZ Ltd, for strategic joint investments in end-to-end logistics infrastructure and solutions, which include rail, maritime services, port operations, digital services, an industrial zone and the establishment of maritime academies in Tanzania.

In last 1 Year the stock gave a return of 81.51% as compared to the rise of Sensex and Nifty in the same period.

India owned over 30% global market share in the ship breaking industry and is home to the largest ship-breaking facility in the world at Alang. With an aim to promote India's shipping and port industry, the government has also introduced various fiscal and non-fiscal incentives for enterprises that develop, maintain and operate ports, inland waterways and shipbuilding in India. Government also plans to invest $82 Billion in port projects by 2035 and ASPEZ being the largest private player in the country is going to benefit a lot from this efforts. In order to align itself with the government’s ambitious plans company has set targets where it aims to have 140 Marine Flotila, 2,000 Kms of Rail tracks, 300 trains, 20 Multi Modal Logistics Park, 10 MMT Grain Silos, 20 mm Sq. Ft. Warehousing capacity and 5000 trucks by FY29F to accelerate its Logistics Business. Company also plans to achieve the targets of 1,000 MMT cargo volumes, Ports Revenue of Rs. 507 Bn (16% CAGR), Ports EBITDA of Rs. 327 Bn (16% CAGR), Ports EBITDA Margin of 64%, Logistics Revenue of Rs. 140 Bn (46% CAGR), Logistics EBITDA of Rs. 35 Bn, Logistics EBITDA Margin of 25%, Total Revenue of Rs. 655 Bn (26% CAGR), EBITDA of Rs. 365 Bn (18% CAGR) and Net Cashflow from operations Rs. 345 Bn (18% CAGR) by 2030. Rating agencies like CARE Ratings has assigned AAA rating to the company which the highest possible credit rating in India, making it the first private corporate infrastructure developer to be rated at AAA. S&P and ICRA also upgraded company outlook from Negative to Stable during the year. Considering company’s leadership in Ports and SEZ industry in the county, its international footprints, key acquisitions, ambitious targets, proven financial track record, highest rating by rating agencies and robust growth of the sector in upcoming years investors can invest in this company for long term period with buy in dips strategy.

HET ZAVERI

info@smartinvestment.in

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NOTE : Though being a fundamentally strong company its shares faces volatility  issues due to political factors. So, only risk taking investors should invest in this company who can stay invested for long term period.