Adani Port & SEZ (ADSEZ IN) – Q2FY26 Result Update – Clear line of sight to scale & profitability – BUY

ADSEZ reported a strong cons operating performance in Q2FY26, driven by 12% cargo volume growth and robust growth in marine & logistics businesses. Domestic cargo volume growth was at 8% due to decline in EXIM coal and iron ore volumes, partly offset by pick up in Mundra volumes post geopolitical issues. Intl’ ports delivered ~80% volume growth on low base, improved Haifa volumes, CWIT commencement, and CT 2 operations at Tanzania. Overall market share rose to 28% and container market share to 45.5%. The logistics and marine businesses delivered robust performance, with EBITDAs growing by 1.4x and 3.8x YoY, respectively. Logistics biz momentum is expected to continue as ADSEZ ramps up rail capacity, warehouses and MMLPs. With a scaled network of domestic and international ports and a rapidly expanding logistics and marine segments, ADSEZ is well placed to benefit from India’s rising trade flows. Well planned capacity additions (1.1–1.2bmt in 5 years) and investments in MMLPs/rail/warehousing would strengthen ADSEZ’s integrated transport utility model. Cost efficiencies to generate industry-leading margins and strong cash flows, while leverage stays comfortable at 1.8x Net Debt/EBITDA. We expect ADSEZ to deliver revenue/EBITDA/PAT CAGR of 17%/15%/20% over FY25–28E. The stock is trading at EV of 13.3x/11.1x FY27/28E EBITDA. Maintain ‘Buy’ with TP of Rs1,777 valuing at 18x EV of Sep’27E EBITDA.