Adani Ports — Q3 FY25 earnings call

Call held 5 Feb 2025

Management summary

APSEZ delivered strong all-round growth in Q3 FY25 driven by container volume gains, operational efficiency, and expanding logistics capabilities. The company upgraded its FY25 EBITDA guidance significantly on the back of robust 9-month performance. Management emphasized the transition from a pure port volume company to an integrated transport solutions provider, with logistics expected to contribute 5-10% of revenue over time. International operations at Haifa and Tanzania showed improving margins heading toward 30%.

Highlights

  • Revenue up 14% YoY, EBITDA up 19% YoY, PAT up 32% YoY for 9M FY25

  • EBITDA margin expanded to 62% from 60% last year

  • Net debt to EBITDA improved to 2.1x vs 2.3x in FY24

  • FY25 EBITDA guidance upgraded to Rs.18,800-18,900 crores from Rs.17,000-18,000 crores

  • Container business grew 14.9% YoY; market share increased from 44% to 45%

  • Gross debt at Rs.45,650 crores; net debt at Rs.38,000 crores as of Dec 2024

  • 9-month capex of Rs.7,500 crores (excluding M&A)

  • Vizhinjam Port commenced; Colombo Port on track for April start

Key financials

2 periods

Headline

  • EBITDA Margin
    62%
  • Net Debt to EBITDA
    2.1×
  • Gross Debt
    ₹45,650 Cr
  • Net Debt
    ₹38,000 Cr

9M

  • Revenue
    —
    YoY +14%
  • EBITDA
    ₹14,000 Cr
    YoY +19%
  • PAT
    —
    YoY +32%
  • Capex
    ₹7,500 Cr

What they filed

Q1 FY27: revenue up 18.6%, net profit up 10.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue7,067 7,964 8,488 9,126 9,167 +30%9,705 +22%10,738 +27%10,821 +19%
EBITDA4,367 4,802 5,006 5,495 5,340 +22%5,786 +20%6,020 +20%6,253 +14%
Net profit2,413 2,518 3,023 3,311 3,120 +29%3,043 +21%3,308 +9%3,650 +10%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Ports (Domestic)
    1% Volume Growth (9M)
  • Containers
    14.9% Volume Growth
  • International
    18% EBITDA Margin
  • Logistics
    23% EBITDA Margin

Guidance & targets

Financials

  • EBITDA FY25 Financials · FY25 · High confidence Rs.18,800-18,900 crores

    Previously Rs.17,000-18,000 crores → Rs.18,800-18,900 crores

    we are upgrading our FY25 guidance to Rs.18,800 to 18,900 crores from the previous guidance of Rs.17,000 to 18,000 crores

    — Ashwani Gupta

  • FY26 EBITDA Growth Financials · FY26 · Medium confidence ~20% YoY growth
    we expect year on year growth to be in the region of 20% +/- broadly without getting into details

    — D. Muthukumaran

Operations

  • International EBITDA Margin Operations · FY27 · Medium confidence 30%

    From 18% today

    it will go towards 30% mark as far as the international operations are concerned and it will ramp up

    — D. Muthukumaran

  • Cargo Volume Ambition FY30 Operations · FY30 · Medium confidence 1 billion tonnes (850 domestic + 150 international)
    we should land in 2029/30 around 1bn, that's our ambition, out of which 820 to 850 should come from domestic

    — Ashwani Gupta

  • Logistics Revenue Contribution Operations · Medium-term · Medium confidence 5-10%

    From ~2% today

    logistics actually is the first step get to 5% contribution and then the next step eventually 10% contribution to the company

    — D. Muthukumaran

Risks & concerns

  • Coal volume decline due to increased domestic production

    medium

    Imported coal volumes declining as Coal India produces more; management says offset by container and other commodity growth

    Both acknowledged

  • Logistics margins dilution from trucking business

    medium

    Overall logistics margins dropped from 28% to 23% QoQ due to trucking business at ~10% margins; management says traditional logistics margins stable

    Analyst acknowledged

  • Gangavaram and Krishnapatnam margin weakness

    low

    CFO called it 'a passing cloud' due to coal volume impact; expects normalization in 1-2 quarters

    Analyst downplayed

  • Net debt increase

    low

    Net debt rose from Rs.35,200 crores (Sep 2024) to Rs.38,000 crores (Dec 2024) but net debt/EBITDA improved to 2.1x

    Analyst acknowledged

Areas of evasion (1)

  • FY26 specific volume/EBITDA guidance deferred to May

Q&A highlights

2 direct
Logistics growth and competitive positioning Direct
we have the strength of having a port network and the trucking and the warehousing in addition to the ICDs and that is where, we want to focus on and spend the capex significantly on the logistics

Clarifies strategic differentiation vs competitors in logistics space with Rs.9-10k crore capex plans

Asked by Alok Deora (Motilal Oswal)

International margin trajectory Direct
it will go towards 30% mark as far as the international operations are concerned... within a couple of years

International EBITDA margins at 18% heading to 30% represents significant upside as Haifa and Tanzania mature

Asked by Sumit Kishore (Axis Capital)

WDFC impact on logistics Partial
The connection to the Western DFC opens up infra for me but it doesn't open up mindset as yet

Reveals rail logistics volumes stagnating despite DFC connectivity; management working on circuit redesign

Asked by Priyankar Biswas (BNP Paribas)

1 min read 4 chapters

Detailed narrative

Integrated Transport Utility Transformation

APSEZ is aggressively repositioning from a port volume company to an integrated transport solutions provider. The newly launched Truck Management Solution (TMS) is a digital marketplace-plus-fulfillment platform aiming to triple truck utilization from 1 trip/day to 3 trips/day. Logistics currently contributes ~2% of revenue with a target of 5-10%. The company plans to scale from 936 trucks to 5,000, warehousing from 3mn to 20mn sq ft, and MMLPs from 12 to 20.

Container Market Share Dominance

APSEZ grew container volumes 14.9% YoY vs all-India growth of 11%, expanding market share from 44% to 45%. The growth was driven by balanced import-export mix (51:49) across West, South and East coast ports. Management invested in CT-5 at Mundra to expand container capacity further, signaling continued confidence in the segment.

International Expansion Gathering Momentum

International operations contributed meaningfully with Haifa handling ~1 million tonnes/month and Tanzania at similar levels. EBITDA margins for international at 18% are guided to reach 30% within 2 years. Colombo is on track for April 2025 commissioning. Management's FY30 ambition targets 85:15 domestic-international volume mix vs current 94:6, representing a transformative shift.

Strong Financial Discipline Despite Growth Investments

Net debt/EBITDA improved to 2.1x from 2.3x in FY24 despite Rs.7,500 crores of capex in 9 months and multiple acquisitions (Astro Offshore, Gopalpur, Tanzania). Short-term debt was only Rs.2,300 crores of the Rs.45,650 crores total. The significant EBITDA guidance upgrade from Rs.17,000-18,000 to Rs.18,800-18,900 crores reflects operational outperformance.

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