BOB Capital Markets Ltd has reiterated its BUY call on Adani Ports and Special Economic Zone Ltd, setting a target price of Rs 1,960, implying an upside of nearly 28% from current levels. The recommendation follows a robust Q3FY26 earnings performance, underpinned by sustained momentum across domestic ports, accelerating scale-up at international assets, and a sharp contribution from logistics and marine services.

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Adani Ports delivered a resilient and broad-based Q3FY26 performance, exceeding expectations on revenue, EBITDA, and profitability, while maintaining industry-leading margins above 60%. Domestic port realizations improved meaningfully despite modest volume growth, international ports reported sharp margin expansion led by Colombo, and non-port businesses emerged as credible growth engines. Management upgraded FY26 EBITDA guidance, supported by new acquisitions and fleet expansion. With revised earnings estimates, improving asset mix, and a disciplined valuation framework, BOB Capital Markets maintains confidence in Adani Ports’ medium-term earnings visibility and reaffirms its BUY rating with a target of Rs 1,960.

Quarterly performance beats expectations across key metrics

Adani Ports posted consolidated Q3FY26 revenue of Rs 97.1 billion, EBITDA of Rs 58.7 billion, and adjusted profit after tax of Rs 31.5 billion, translating into year-on-year growth of 22%, 23%, and 20%, respectively. EBITDA margins remained steady at 60.5%, underscoring the company’s ability to absorb mix changes while preserving profitability.

Revenue and EBITDA both came in 4–5% above analyst expectations, driven by a combination of stronger realizations at domestic ports, a turnaround in international margins, and rapid growth in logistics and marine services.

Domestic ports show pricing power despite modest volume growth

Domestic port volumes increased 6% year-on-year to approximately 113 million metric tonnes, while realizations improved by a sharper 9%, reflecting a favorable cargo mix and the benefit of take-or-pay contracts. Excluding recently commissioned ports such as Vizhinjam and Gopalpur, domestic volumes were broadly flat, highlighting the maturity of core assets.

Performance across ports was mixed. Declines at Mundra and Karaikal were more than offset by strong gains at Krishnapatnam and Gangavaram. Despite a slight contraction in overall cargo market share to 26.4%, container market share improved to 45.8%, reinforcing Adani Ports’ leadership in high-margin containerized cargo.

International ports deliver sharp margin expansion

International port revenue rose 20% year-on-year to Rs 10.7 billion, while EBITDA more than doubled to Rs 2.4 billion. EBITDA margins expanded to 22.1%, driven primarily by the continued ramp-up of Colombo operations, which now operate at significantly higher utilization and margins.

Management revised FY26 EBITDA guidance upward by approximately Rs 8 billion, factoring in the contribution from the newly acquired NQXT port, which is expected to add around Rs 3 billion in EBITDA in Q4FY26 alone. Colombo’s near-term capacity constraints further enhance the strategic importance of Vizhinjam as a long-term transshipment hub.

Logistics and marine emerge as meaningful growth engines

The logistics segment reported revenue growth of 62% year-on-year to Rs 11.2 billion, led by rapid scaling of asset-light trucking operations. While segment margins moderated to 18.1% due to business mix, volumes and network reach expanded meaningfully.

The marine services segment delivered one of the strongest performances, with revenue rising 90% year-on-year to Rs 7.7 billion and EBITDA reaching Rs 4.3 billion, implying margins of nearly 55%. Fleet strength increased to 129 vessels, positioning the segment for sustained growth in offshore services, dredging support, and port-linked marine operations.

Management commentary highlights long-term capacity build-up

Management announced Phase II capex of approximately Rs 160 billion at Vizhinjam, expanding capacity from 1.6 million TEUs to 5.7 million TEUs. Capex deployment is expected to extend through FY29, with cash outflows continuing into FY30.

The company also signed an MoU with BPCL to explore ship-to-ship LNG bunkering at Vizhinjam, leveraging its proximity to international shipping lanes. Management reiterated its ambition to achieve 1 billion metric tonnes of throughput by FY30, with international assets contributing around 150 million metric tonnes.

Revised estimates reflect stronger earnings trajectory

BOBCAPS has revised its FY26–FY28 earnings estimates upward, incorporating NQXT volumes while moderating assumptions for ex-NQXT core volumes. FY26 revenue is now estimated at Rs 375 billion, EBITDA at Rs 225.6 billion, and adjusted net profit at Rs 132.1 billion.

EBITDA margins are expected to remain structurally strong, hovering around 58–60%, even as the contribution from logistics and marine increases. Adjusted EPS is projected to rise from Rs 57.3 in FY26 to Rs 71.8 in FY27, reflecting operating leverage and controlled financing costs.

Valuation and target price rationale

BOBCAPS values Adani Ports at 16x December 2027E EBITDA, a multiple that reflects its dominant market position, diversified asset base, and improving international footprint. This methodology yields a December 2026 target price of Rs 1,960.

At current levels, the stock trades at approximately 13.9x FY26E EV/EBITDA and 26.7x FY26E adjusted P/E, which the brokerage views as reasonable given the company’s long-term growth visibility, balance sheet deleveraging trajectory, and superior return profile.

Investment view: momentum intact, risks manageable

Adani Ports enters FY27 with clear earnings visibility, supported by steady domestic realizations, expanding international margins, and scalable non-port businesses. While execution risk around large capex programs and global trade volatility remain key monitorables, the company’s diversified earnings mix and strong cash flow generation provide a meaningful buffer.