Key facts
- Nomura raised its price target for Adani Ports to Rs 2,080 from Rs 1,850, a 13% increase.
- The new target implies a potential 15% upside from current market levels.
- Nomura retained its Buy rating on the Adani Group stock.
- EBITDA estimates for FY27 and FY28 were increased by 1% and 2% respectively.
- The brokerage identified slower cargo growth and geopolitical tensions as key risks.
Nomura has raised its price target for Adani Ports and Special Economic Zone (APSEZ) to Rs 2,080 from Rs 1,850, while maintaining a Buy rating on the stock. This revised target suggests a potential upside of approximately 15% from current levels.
The brokerage also marginally increased its EBITDA forecasts for FY27 and FY28, attributing this to expectations of a more favorable revenue mix. However, Nomura flagged slower cargo volume growth and escalating geopolitical tensions as key risks to the company's outlook.
Nomura's bullish stance is underpinned by several factors. The firm believes Adani Ports is well-positioned to benefit from long-term industry tailwinds in India's freight and logistics sector. Management anticipates the market to expand at an 8.6% CAGR between CY25 and CY31, driven by rising trade, e-commerce growth, increased manufacturing, and infrastructure development.
The company's strong guidance includes plans to significantly expand domestic port capacity to 1,000 MT by CY30 from 653 MT in FY26. This expansion is expected to support domestic port traffic of 850 MT and overall port traffic of 1,000 MT by CY30, implying CAGRs of 14% and 16%, respectively, from FY26 levels. Management has also guided for EBITDA CAGRs of 18% in ports, 27% in logistics, and 19% in the marine segment over FY26-31, leading to projected revenue, EBITDA, and cash flow from operations CAGRs of 19%, 18%, and 18%, respectively.
This growth roadmap will be supported by a planned capital expenditure of Rs 90,000 crore to Rs 1 lakh crore over five years through FY31. Alongside growth, management aims to improve return on capital employed (ROCE) by 1 percentage point annually. Nomura considers these targets achievable given Adani Ports' industry experience, execution track record, and favorable outlook, factoring in an EBITDA CAGR of 19% for the company over FY26-29.
Adani Ports shares have seen a 22% increase in 2026 and a 30% rise in the past year. The company recently reported a consolidated net profit of Rs 3,329 crore for the March-ended quarter, a 10% increase year-on-year, with revenue growing 26% year-on-year to Rs 10,737 crore in Q4FY26.