Adani Ports (APSEZ) Growth Outlook: Tax Payments Surge 25% to ₹58,104 Crore in FY24
Business and Industry Overview
Adani Ports and Special Economic Zone (APSEZ) is India’s largest port operator, managing 25% of the country’s cargo through 13 strategically located ports across seven states. It also operates logistics parks and India’s largest Special Economic Zone (SEZ) in Mundra, spanning 8,000 hectares, which serves as a major hub for industrial development. The company has been expanding rapidly by acquiring new ports and enhancing its infrastructure to efficiently handle container, dry, and liquid cargo. APSEZ has formed partnerships with leading global businesses, strengthening its position in the industry. It aims to become the world’s largest private port operator and India’s most comprehensive transport utility by 2030. To achieve this, it is reducing financial exposure to group firms, divesting non-core assets, and broadening its logistics network, including warehouses, rail, trucking, air freight, and inland waterways. Recognized as a great place to work, APSEZ continues to drive India’s trade growth and contribute significantly to the economy.
India’s ports are growing fast! In FY24, major ports handled 819 million tonnes of cargo—4.45% more than last year. Smaller, non-major ports also saw an 11% increase. India’s exports also went up to $451 billion from $417 billion in the previous year. The government is making ports bigger and better, allowing 100% foreign investment, which has brought in $1.637 billion so far. Many projects are happening under public-private partnerships (PPP), with 46 major projects worth $4.49 billion in progress. The Sagarmala Programme is working on over 200 modernization projects worth $10.71 billion, aiming to increase port capacity to handle more cargo by 2025. Big projects include a new $9.14 billion mega port in Maharashtra and infrastructure upgrades worth $22 million at Chennai and Kamarajar ports. The government has also set aside $281 million for port development in the 2024-25 budget.
Private companies like Adani Ports are expanding fast, planning to invest $3 billion to grow their global presence. They’ve also secured a five-year deal at Kolkata Port and got approval for a $5.39 billion expansion of Mundra Port, which already handles 27% of India’s total cargo. India is also focusing on eco-friendly initiatives, aiming for net-zero emissions by 2070 and doubling ship recycling capacity by 2024. New policies and investments in inland waterways are making trade easier and more efficient. Overall, India’s ports are modernizing quickly with better infrastructure, bigger investments, and a strong push toward sustainability, making trade smoother and more efficient. In December 2024, Adani Ports and Special Economic Zone (APSEZ) handled 38.4 million metric tons (MMT) of cargo, which is 8% more than the previous year. This growth was mainly due to a 22% increase in container handling. From April to December 2024, APSEZ managed a total of 332.4 MMT of cargo, 7% more than the same period last year. Container shipments went up by 9%, and liquid and gas cargo rose by 8%. In logistics, the company transported 0.48 million TEUs (containers moved by rail), showing a 9% increase. Meanwhile, freight moved under a special railway investment scheme (GPWIS) grew by 13% to 16.1 MMT. In October 2024, APSEZ reported a net profit of ₹2,445 crore for the second quarter of FY25, which is nearly 40% higher than the previous year. During this period, it handled 111 MMT of cargo, a 10% increase. Over the years, APSEZ has become a leader in the shipping industry by improving efficiency and smartly connecting ports with industrial zones and warehouses. Between FY2016 and FY2021, Indian ports increased their average output per ship by 32%, with APSEZ playing a key role. By making better use of its assets and streamlining operations, APSEZ has strengthened its position in the industry.
Latest Stock News
Adani Group is planning to invest ₹30,000 crore in Kerala over the next five years. Their main focus will be improving ports and airports and setting up new businesses in logistics and e-commerce. A big part of the investment—₹5,500 crore—will go toward expanding Thiruvananthapuram airport, allowing it to handle 12 million passengers a year instead of the current 4.5 million. Another ₹20,000 crore will be used to develop Vizhinjam port, aiming to make it one of the world’s biggest ports for transferring goods. The company will also expand its cement-handling facilities and build a logistics and e-commerce hub in Kochi. Karan Adani, the Managing Director of Adani Ports and SEZ, shared these plans at the Invest Kerala Global Summit. The Kerala government is organising this event to attract more businesses and investors. The summit focuses on industries like tourism, food processing, healthcare, technology, aerospace, and defence. It includes 28 sessions with business representatives from six countries and over 3,000 attendees. Adani Ports and Special Economic Zone (APSEZ) made a profit of ₹2,520 crore between October and December 2024, which is 14% higher than last year’s ₹2,208 crore. However, this was lower than what experts had predicted (₹2,597 crore – ₹2,711 crore). The company’s revenue for the quarter was ₹7,964 crore, a 15% increase from ₹6,920 crore last year. Despite the profit growth, APSEZ’s stock price dropped by 5% to ₹1,042 after the results were announced. Most of the company’s earnings came from port and SEZ activities, bringing in ₹7,413 crore. Their operating profit (EBITDA) was ₹4,802 crore, up 15% from ₹4,186 crore last year. The company’s debt situation also improved, as its debt-to-profit ratio went down from 2.3 to 2.1 times. APSEZ’s CEO, Ashwani Gupta, said the company is growing steadily, gaining market share, and improving efficiency. He also announced a new trucking service to improve transportation. The company has now adjusted its profit forecast for the full year 2025, expecting to earn between ₹18,800 crore and ₹18,900 crore. Even though the company performed well, its stock price dropped because investors were expecting even higher profits.
Potentials
Adani Ports and Special Economic Zone (APSEZ) has significant growth opportunities as it continues to expand its operations. The company is investing heavily in ports, airports, and logistics hubs, with a ₹30,000 crore investment planned in Kerala over the next five years. A major part of this investment is focused on developing the Vizhinjam port, which aims to become one of the largest transshipment hubs in the world. Additionally, APSEZ is handling increasing volumes of cargo, with an 8% rise in December 2024. Container volumes are also growing, contributing to higher revenues. The company’s financial performance remains strong, with a 14% increase in net profit in Q3 FY25, reaching ₹2,520 crore, while revenue grew by 15%. Strategic investments in logistics and e-commerce hubs, particularly in Kochi, and improvements in railway infrastructure further support the company’s expansion.
However, APSEZ also faces certain risks that could impact its growth. Despite its profit increase, the earnings were below analysts’ expectations, which might affect investor confidence. The company’s business is closely linked to global trade, meaning any slowdown in the world economy could reduce cargo volumes and revenue. Additionally, regulatory challenges, environmental restrictions, and political factors could delay projects like the Vizhinjam port. Competition from other major ports in India and neighboring countries is another risk, as it could limit APSEZ’s market share. To sustain its growth, the company needs to effectively manage these risks while continuing its strategic expansion.
Analyst Insights
Key Metrics:
Market Value: ₹2,31,329 crore
Price-to-Earnings (P/E) Ratio: 21.9
Book Value per Share: ₹265
Dividend Yield: 0.56%
Return on Capital (ROCE): 12.9%
Return on Equity (ROE): 18.1%
Dividend Payout: 19.3%
Sales Growth (Last 10 Years): 18.7% per year on average
Adani Ports is growing steadily, reporting a 14% increase in profit compared to last year. The company is investing ₹30,000 crore in Kerala to expand its ports, airports, and logistics infrastructure, which will boost its future earnings. One major project, the Vizhinjam transshipment port, is expected to become one of the biggest in the world, helping India become a key player in global trade. However, there are challenges. The company’s recent profit was lower than expected, which has made some investors cautious. Factors like global trade uncertainties, government regulations, and competition from other ports could impact future growth. Also, the stock is currently priced at a P/E ratio of 21.9, meaning it is not too expensive but not undervalued either.
If you already own the stock, then hold onto it for long-term growth. The company has strong fundamentals, so it remains a good investment in the infrastructure and logistics sector.