Motilal Oswal Sees Growth Potential in Adani Ports and SEZ, Targets Rs 1820

India's Shipping Disruption Affects Major Ports, but Adani Ports and SEZ Remains Resilient

A recent disruption at the Strait of Hormuz has caused a slowdown in global shipping, resulting in slower cargo movement and rerouting. This has led to challenges for Indian ports, including unscheduled cargo inflows from diverted vessels, which have caused congestion and export backlogs. Given India's heavy dependence on crude imports, this disruption is particularly significant. However, Adani Ports and SEZ (APSEZ) has managed to maintain its resilience, with its exposure to liquid cargo remaining relatively limited, accounting for less than 10% of total volumes.

Within the liquid cargo category, crude oil handling accounted for approximately 6% in fiscal year 2025, moderating to around 5% in the first nine months of fiscal year 2026. Gas volumes, on the other hand, continue to represent a small portion of the mix, at around 2% in both periods. As a result, the overall impact on APSEZ is expected to remain contained. The addition of NQXT port volumes is likely to ensure robust overall volumes going forward.

India's major ports have seen a growth in volumes, with all-India major port volumes increasing by 3.5% year-over-year in February 2026 and approximately 8% year-to-date in fiscal year 2026. This growth is driven by healthy traction in petroleum, containers, and coking coal. Non-major port volumes, on the other hand, inched up by around 3% year-over-year, led by steady traction in container traffic, which grew by 5% year-over-year. Petroleum, oil, and lubricants (POL) volumes remained largely flat year-over-year.

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Outlook

These factors reinforce APSEZ's ambition to become India's largest integrated transport utility by 2029, with logistics and marine emerging as key growth engines alongside its core ports business. We reiterate our BUY rating with a target price of INR1,820 (based on 15x FY28E EV/EBITDA).