Motilal Oswal Research has reaffirmed its bullish stance on Adani Ports & SEZ Limited (APSEZ), assigning a BUY rating with a target price of Rs 1,770, representing a potential upside of 16 percent from the current market price of Rs 1,531. The brokerage's optimism stems from APSEZ's container-led momentum, diversified cargo mix, and rapidly scaling integrated logistics platform that positions the company to become India's largest integrated transport utility by 2029. With robust financial metrics including a 60.2 percent EBITDA margin for FY2026E and declining net debt-to-equity ratio of 0.5x, the infrastructure behemoth demonstrates compelling fundamentals underpinned by sustainable operational efficiency and strategic capacity expansions across domestic and international markets.

Dominant Market Position Reinforces Competitive Moat

APSEZ commands an impressive 28.1 percent market share in India's port sector as of September 2025, marking an expansion from 27.4 percent in the corresponding period last year. The conglomerate operates the nation's largest private port network comprising 15 domestic ports and terminals strategically positioned across the western, southern, and eastern coastlines, supplemented by four international facilities in Israel, Sri Lanka, Tanzania, and Australia. Management has underscored that the company's domestic port volume growth trajectory over the preceding decade has outpaced the broader industry by a factor of three, demonstrating exceptional operational prowess and market penetration capabilities.​

The container segment represents a particularly formidable growth engine, with market share escalating dramatically to 45.9 percent from 36 percent during the March 2020 to September 2025 timeframe. October 2025 witnessed a 24 percent year-over-year surge in container volumes, propelled by international cargo flows and the commissioning of new port infrastructure. Total cargo handled during the month stood at 40.2 million metric tonnes, while year-to-date volumes reached approximately 284 million metric tonnes, with container volumes maintaining an average growth rate of 22 percent.​

Strategic Cargo Diversification Mitigates Commodity Concentration Risk

APSEZ has orchestrated a deliberate recalibration of its cargo composition, systematically reducing dependency on coal volumes which have declined from approximately 38 percent of total cargo in FY2024 to 33 percent in FY2025 and further to 32 percent in the first half of FY2026. This structural shift reflects prudent risk management as the company pivots toward coastal coal and containerized cargo, effectively offsetting the diminishing contribution from traditional thermal coal shipments. The diversification strategy insulates APSEZ from cyclical volatility inherent in single-commodity exposure while capitalizing on burgeoning demand in higher-margin container logistics.​

Broader industry dynamics during October 2025 revealed divergent trends, with volumes at major ports increasing 12 percent year-over-year to 76.3 million metric tonnes, while non-major port volumes contracted 6.4 percent to 60.1 million metric tonnes. Container cargo at major ports expanded 13 percent to 17.7 million metric tonnes, whereas coal and petroleum-oil-lubricants segments, each constituting approximately 25 percent of the commodity mix, declined 13 percent and 12 percent respectively.​

Integrated Logistics Ecosystem Captures Enhanced Customer Wallet Share

The logistics division, anchored by Adani Logistics Limited (ALL), has achieved remarkable scalability across multiple verticals including container train operations, inland container depots, warehousing facilities, and trucking solutions. The platform currently encompasses 12 multi-modal logistics parks, 132 dedicated freight trains, 3.1 million square feet of warehousing capacity, and 1.3 million metric tonnes of grain silo infrastructure, collectively delivering comprehensive "shore-to-door" logistics solutions. This vertically integrated value proposition enables APSEZ to capture substantially higher customer wallet share while fostering cargo stickiness through seamless end-to-end service delivery.​

Management has earmarked substantial capital deployment for trucking operations, with Rs 10-15 billion allocated for FY2026 and Rs 50 billion designated by FY2030. The company maintains a hybrid operational model, directly owning 937 trucks while coordinating over 26,000 vehicles through third-party partnerships. Strategic expansion into value-added services such as freight forwarding is designed to optimize return on capital employed and enhance operational margins. The integrated logistics architecture positions APSEZ to achieve ambitious volume targets of 850 million metric tonnes domestically and 150 million metric tonnes internationally by 2030.​

Marine Services Vertical Emerges as High-Margin Growth Catalyst

The marine operations segment has crystallized as a rapidly scaling, high-profitability business vertical within APSEZ's portfolio, operating a diversified fleet of 127 vessels excluding 46 vessels deployed by Adani Harbour across APSEZ port facilities. The maritime assets span tugs, anchor handling tug supply vessels, multipurpose support vessels, workboats, and barges. Strategic acquisitions including Ocean Sparkle in 2022 and Astro Offshore in 2024, coupled with the establishment of TAHID to orchestrate international operations across the Middle East, Africa, and South Asia region, have substantially fortified the business unit.​

During the second quarter of FY2026, marine revenue surged an extraordinary 237 percent year-over-year to Rs 6.4 billion, with EBITDA expanding to approximately Rs 3.4 billion and margins widening to an impressive 52.7 percent. This exceptional performance emanated from vessel additions, seamless integration of acquired entities, and amplified demand from Tier-1 clientele. Return on capital employed in the marine business improved to 15 percent in the first half of FY2026 from 13 percent in FY2025. Management articulates aspirations to double revenue from Rs 11.4 billion in FY2025, positioning the segment as a capital-efficient, high-return business that complements core port operations while extending APSEZ's footprint across global shipping corridors.​

Robust Financial Architecture Supports Aggressive Expansion

APSEZ's balance sheet exhibits considerable financial resilience, characterized by strong operating cash flows, a healthy cash reserve of Rs 130 billion, and a manageable net debt-to-EBITDA ratio of 1.8x. The company's financial metrics demonstrate progressive improvement, with net debt-to-equity projected to decline from 0.6x in FY2025 to 0.3x by FY2028E. Return on equity is anticipated to stabilize around 19-20 percent range during FY2026-27E before moderating to 18.8 percent in FY2028E, while return on capital employed is forecast to strengthen from 12.2 percent in FY2025 to 14.2 percent by FY2027-28E.​

Revenue is projected to compound at 14 percent CAGR from Rs 305 billion in FY2025 to Rs 456 billion by FY2028E, while EBITDA is expected to grow at 15 percent CAGR reaching Rs 277 billion in FY2028E with margins stabilizing around 60-61 percent. Adjusted profit after tax is forecasted to compound at 18 percent CAGR, escalating from Rs 108 billion in FY2025 to Rs 178 billion in FY2028E. Earnings per share are anticipated to advance from Rs 50.2 in FY2025 to Rs 82.3 by FY2028E, representing robust bottom-line expansion.​

Key Investment Levels and Trading Parameters

Strategic Capacity Expansions Underpin Long-Term Visibility

APSEZ's growth trajectory is anchored by significant capacity enhancement initiatives at strategic port locations, ongoing infrastructure development projects, and selective global port acquisitions. The company has articulated ambitious volume handling targets of 505-515 million metric tonnes for FY2026, supported by an 8 percent CAGR in cargo volumes through FY2028E. Key capacity expansions include the automated Colombo West International Terminal, new berths at Dhamra port, and the accelerated ramp-up of the strategically located Vizhinjam facility.​

The diversified cargo portfolio coupled with systematic infrastructure investments provides enhanced visibility for sustained growth beyond FY2026. Deeper integration into Dedicated Freight Corridor-linked hinterland corridors and proximity to industrial clusters constitute pivotal long-term growth drivers. The convergence of ports, logistics, and marine services positions APSEZ to capitalize on India's burgeoning trade volumes and evolving supply chain requirements, reinforcing the investment thesis articulated by Motilal Oswal's BUY recommendation.​

Shareholding Structure and Institutional Participation