Adani Ports

Adani Ports delivered a robust Q4 FY26, surpassing its own guidance. The company reported a 25% increase in revenue, a 20% rise in EBITDA, and a 16% growth in PAT for the full fiscal year. Net debt to EBITDA stood at a healthy 1.9x, and the overall Return on Capital Employed (ROCE) reached 16%. Management highlighted the achievement of handling 500 million metric tons of cargo, marking a significant infrastructure milestone for India.

Domestic ports handled 451 million metric tons, with revenue and EBITDA growing by 13% and 14% respectively, and market share reaching 27.1%. Domestic ports ROCE improved to 23% from 21%. International ports saw substantial growth, with revenue up 34% and EBITDA soaring by 180%, driven by the ramp-up of CWIT Colombo terminal and the NQXT Australia acquisition. The Logistics business also demonstrated strong performance, with revenue growing 55% and achieving a double-digit ROCE of 10% in FY26, ahead of its Ambition 2030 target.

The company's capital allocation strategy prioritizes organic capex, funded 60-70% by annual operating cash, followed by strategic M&A. FY26 capex was INR 15,000 crores, with a guidance of INR 12,000-14,000 crores for the next fiscal year. Capex acceleration was noted for Mundra (CT5), Dhamra (volume growth), Hazira (liquid), and Vizhinjam (Phase 2). Management reiterated its commitment to maintaining a net debt to EBITDA ratio below 2.5x, demonstrating financial discipline while pursuing growth opportunities, including potential $1 billion acquisitions.

Adani Ports navigated challenges such as Operation Sindoor, geopolitical issues, and the West Asia crisis. These events led to business mix changes, including less imported coal and more coastal coal, and required operational adjustments like providing extended free storage for containers at Mundra, utilizing 100 extra acres of land. Management emphasized its resilience and agility in adapting to these disruptions, ensuring continued service and aiming for improved business mix in Q1 FY27.

The company is investing heavily in technology and automation to enhance productivity and achieve cost efficiencies. Initiatives include replacing diesel GSUs with electric ones, aiming for 100% reserve energy at ports within 1.5 years, and making provisions for shore power for international vessels within 2.5 years. These investments are part of a broader decarbonization and biodiversity strategy (Net Zero 2040, TNF 2050), which also yields economic benefits by keeping cost per ton flat and increasing revenue per ton through services, exchange rates, and pricing power.

Adani Ports aims for a 18-19% CAGR over the next five years, targeting to deliver twice the growth in 5 years with a 20% ROCE at a consolidated level. The company projects handling 850 million tons of domestic cargo by 2030 within a theoretical capacity of 1 billion tons, which could potentially expand to 1.1-1.2 billion tons. Management expressed optimism about India's growth trajectory, expecting APSEZ's growth to be 1.5x to 1.8x that of India's GDP, supported by tailwinds in coal demand and new trade routes.